Correlation Between Philippine National and Century Properties

Can any of the company-specific risk be diversified away by investing in both Philippine National and Century Properties at the same time? Although using a correlation coefficient on its own may not help to predict future stock returns, this module helps to understand the diversifiable risk of combining Philippine National and Century Properties into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between Philippine National Bank and Century Properties Group, you can compare the effects of market volatilities on Philippine National and Century Properties and check how they will diversify away market risk if combined in the same portfolio for a given time horizon. You can also utilize pair trading strategies of matching a long position in Philippine National with a short position of Century Properties. Check out your portfolio center. Please also check ongoing floating volatility patterns of Philippine National and Century Properties.

Diversification Opportunities for Philippine National and Century Properties

0.81

Correlation Coefficient

Philippine National  Century Properties

Very poor diversification

The 3 months correlation between Philippine and Century is 0.81. Overlapping area represents the amount of risk that can be diversified away by holding Philippine National Bank and Century Properties Group in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Century Properties and Philippine National is a relative statistical measure of the degree to which these equity instruments tend to move together. The correlation coefficient measures the extent to which returns on Philippine National Bank are associated (or correlated) with Century Properties. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Century Properties has no effect on the direction of Philippine National i.e., Philippine National and Century Properties go up and down completely randomly.

Pair Corralation between Philippine National and Century Properties

Assuming the 90 days trading horizon Philippine National Bank is expected to generate 0.97 times more return on investment than Century Properties. However, Philippine National Bank is 1.03 times less risky than Century Properties. It trades about 0.19 of its potential returns per unit of risk. Century Properties Group is currently generating about 0.09 per unit of risk. If you would invest  4,820  in Philippine National Bank on May 6, 2025 and sell it today you would earn a total of  1,375  from holding Philippine National Bank or generate 28.53% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Strong
Accuracy	98.41%
Values	Daily Returns

Philippine National Bank  vs.  Century Properties Group

Philippine National Bank

Risk-Adjusted Performance

Good

Compared to the overall equity markets, risk-adjusted returns on investments in Philippine National Bank are ranked lower than 15 (%) of all global equities and portfolios over the last 90 days. In spite of rather unsteady technical and fundamental indicators, Philippine National exhibited solid returns over the last few months and may actually be approaching a breakup point.

Century Properties

Risk-Adjusted Performance

Modest

Compared to the overall equity markets, risk-adjusted returns on investments in Century Properties Group are ranked lower than 6 (%) of all global equities and portfolios over the last 90 days. In spite of rather unsteady technical and fundamental indicators, Century Properties may actually be approaching a critical reversion point that can send shares even higher in September 2025.

Pair Trading with Philippine National and Century Properties

The main advantage of trading using opposite Philippine National and Century Properties positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Philippine National position performs unexpectedly, Century Properties can make up some of the losses. Pair trading also minimizes risk from directional movements in the market. For example, if an entire industry or sector drops because of unexpected headlines, the short position in Century Properties will offset losses from the drop in Century Properties' long position.

The idea behind Philippine National Bank and Century Properties Group pairs trading is to make the combined position market-neutral, meaning the overall market's direction will not affect its win or loss (or potential downside or upside). This can be achieved by designing a pairs trade with two highly correlated stocks or equities that operate in a similar space or sector, making it possible to obtain profits through simple and relatively low-risk investment.

Check out your portfolio center.

Note that this page's information should be used as a complementary analysis to find the right mix of equity instruments to add to your existing portfolios or create a brand new portfolio. You can also try the Headlines Timeline module to stay connected to all market stories and filter out noise. Drill down to analyze hype elasticity.