Correlation Between COL Financial and LFM Properties
Can any of the company-specific risk be diversified away by investing in both COL Financial 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 COL Financial and LFM Properties into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between COL Financial Group and LFM Properties Corp, you can compare the effects of market volatilities on COL Financial 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 COL Financial with a short position of LFM Properties. Check out your portfolio center. Please also check ongoing floating volatility patterns of COL Financial and LFM Properties.
Diversification Opportunities for COL Financial and LFM Properties
0.5 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between COL and LFM is 0.5. Overlapping area represents the amount of risk that can be diversified away by holding COL Financial Group 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 COL Financial 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 COL Financial Group 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 COL Financial i.e., COL Financial and LFM Properties go up and down completely randomly.
Pair Corralation between COL Financial and LFM Properties
Assuming the 90 days trading horizon COL Financial Group is expected to generate 0.15 times more return on investment than LFM Properties. However, COL Financial Group is 6.56 times less risky than LFM Properties. It trades about 0.2 of its potential returns per unit of risk. LFM Properties Corp is currently generating about 0.02 per unit of risk. If you would invest 162.00 in COL Financial Group on October 20, 2024 and sell it today you would earn a total of 8.00 from holding COL Financial Group or generate 4.94% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 55.56% |
| Values | Daily Returns |
COL Financial Group vs. LFM Properties Corp
Performance |
| Timeline |
| COL Financial Group |
| LFM Properties Corp |
COL Financial and LFM Properties Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with COL Financial and LFM Properties
The main advantage of trading using opposite COL Financial and LFM Properties positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if COL Financial 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.| COL Financial vs. VistaREIT | COL Financial vs. Bright Kindle Resources | COL Financial vs. Philippine National Bank | COL Financial vs. Atok Big Wedge |
| LFM Properties vs. COL Financial Group | LFM Properties vs. Century Pacific Food | LFM Properties vs. Asia United Bank | LFM Properties vs. BDO Unibank |
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 Sync Your Broker module to sync your existing holdings, watchlists, positions or portfolios from thousands of online brokerage services, banks, investment account aggregators and robo-advisors..
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