Correlation Between Concepcion Industrial and LFM Properties
Can any of the company-specific risk be diversified away by investing in both Concepcion Industrial and LFM 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 Concepcion Industrial and LFM Properties into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Concepcion Industrial Corp and LFM Properties Corp, you can compare the effects of market volatilities on Concepcion Industrial and LFM 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 Concepcion Industrial with a short position of LFM Properties. Check out your portfolio center. Please also check ongoing floating volatility patterns of Concepcion Industrial and LFM Properties.
Diversification Opportunities for Concepcion Industrial and LFM Properties
-0.08 | Correlation Coefficient |
Good diversification
The 3 months correlation between Concepcion and LFM is -0.08. Overlapping area represents the amount of risk that can be diversified away by holding Concepcion Industrial Corp and LFM Properties Corp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on LFM Properties Corp and Concepcion Industrial 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 Concepcion Industrial Corp are associated (or correlated) with LFM Properties. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of LFM Properties Corp has no effect on the direction of Concepcion Industrial i.e., Concepcion Industrial and LFM Properties go up and down completely randomly.
Pair Corralation between Concepcion Industrial and LFM Properties
Assuming the 90 days trading horizon Concepcion Industrial Corp is expected to under-perform the LFM Properties. But the stock apears to be less risky and, when comparing its historical volatility, Concepcion Industrial Corp is 6.58 times less risky than LFM Properties. The stock trades about -0.01 of its potential returns per unit of risk. The LFM Properties Corp is currently generating about 0.05 of returns per unit of risk over similar time horizon. If you would invest 5.50 in LFM Properties Corp on August 25, 2024 and sell it today you would earn a total of 0.10 from holding LFM Properties Corp or generate 1.82% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 66.13% |
| Values | Daily Returns |
Concepcion Industrial Corp vs. LFM Properties Corp
Performance |
| Timeline |
| Concepcion Industrial |
| LFM Properties Corp |
Concepcion Industrial and LFM Properties Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Concepcion Industrial and LFM Properties
The main advantage of trading using opposite Concepcion Industrial and LFM Properties positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Concepcion Industrial position performs unexpectedly, LFM 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 LFM Properties will offset losses from the drop in LFM Properties' long position.| Concepcion Industrial vs. Allhome Corp | Concepcion Industrial vs. Jollibee Foods Corp | Concepcion Industrial vs. LFM Properties Corp | Concepcion Industrial vs. PXP Energy Corp |
| LFM Properties vs. Concepcion Industrial Corp | LFM Properties vs. Converge Information Communications | LFM Properties vs. Transpacific Broadband Group | LFM Properties vs. Pacificonline Systems |
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 Competition Analyzer module to analyze and compare many basic indicators for a group of related or unrelated entities.
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