Correlation Between Whole Foods and Ayala Land

Can any of the company-specific risk be diversified away by investing in both Whole Foods and Ayala Land 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 Whole Foods and Ayala Land into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between Whole Foods Market and Ayala Land, you can compare the effects of market volatilities on Whole Foods and Ayala Land 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 Whole Foods with a short position of Ayala Land. Check out your portfolio center. Please also check ongoing floating volatility patterns of Whole Foods and Ayala Land.

Diversification Opportunities for Whole Foods and Ayala Land

0.0

Correlation Coefficient

Whole Foods  Ayala Land

Pay attention - limited upside

The 3 months correlation between Whole and Ayala is 0.0. Overlapping area represents the amount of risk that can be diversified away by holding Whole Foods Market and Ayala Land in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Ayala Land and Whole Foods 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 Whole Foods Market are associated (or correlated) with Ayala Land. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Ayala Land has no effect on the direction of Whole Foods i.e., Whole Foods and Ayala Land go up and down completely randomly.

Pair Corralation between Whole Foods and Ayala Land

If you would invest  1,274  in Ayala Land on January 25, 2024 and sell it today you would earn a total of  0.00  from holding Ayala Land or generate 0.0% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Flat
Strength	Insignificant
Accuracy	0.0%
Values	Daily Returns

Whole Foods Market  vs.  Ayala Land

Whole Foods Market

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Whole Foods Market has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of very healthy technical and fundamental indicators, Whole Foods is not utilizing all of its potentials. The latest stock price disarray, may contribute to short-term losses for the investors.

Ayala Land

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Ayala Land has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of fairly strong basic indicators, Ayala Land is not utilizing all of its potentials. The recent stock price disturbance, may contribute to short-term losses for the investors.

Pair Trading with Whole Foods and Ayala Land

The main advantage of trading using opposite Whole Foods and Ayala Land positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Whole Foods position performs unexpectedly, Ayala Land 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 Ayala Land will offset losses from the drop in Ayala Land's long position.

The idea behind Whole Foods Market and Ayala Land 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.

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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 Portfolio Optimization module to compute new portfolio that will generate highest expected return given your specified tolerance for risk.