Correlation Between San Miguel and LFM Properties
Can any of the company-specific risk be diversified away by investing in both San Miguel 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 San Miguel and LFM Properties into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between San Miguel Pure and LFM Properties Corp, you can compare the effects of market volatilities on San Miguel 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 San Miguel with a short position of LFM Properties. Check out your portfolio center. Please also check ongoing floating volatility patterns of San Miguel and LFM Properties.
Diversification Opportunities for San Miguel and LFM Properties
-0.09 | Correlation Coefficient |
Good diversification
The 3 months correlation between San and LFM is -0.09. Overlapping area represents the amount of risk that can be diversified away by holding San Miguel Pure 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 San Miguel 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 San Miguel Pure 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 San Miguel i.e., San Miguel and LFM Properties go up and down completely randomly.
Pair Corralation between San Miguel and LFM Properties
Assuming the 90 days trading horizon San Miguel Pure is expected to generate 0.14 times more return on investment than LFM Properties. However, San Miguel Pure is 7.32 times less risky than LFM Properties. It trades about 0.07 of its potential returns per unit of risk. LFM Properties Corp is currently generating about 0.0 per unit of risk. If you would invest 3,642 in San Miguel Pure on August 25, 2024 and sell it today you would earn a total of 1,658 from holding San Miguel Pure or generate 45.52% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 61.41% |
| Values | Daily Returns |
San Miguel Pure vs. LFM Properties Corp
Performance |
| Timeline |
| San Miguel Pure |
| LFM Properties Corp |
San Miguel and LFM Properties Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with San Miguel and LFM Properties
The main advantage of trading using opposite San Miguel and LFM Properties positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if San Miguel 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.The idea behind San Miguel Pure and LFM Properties Corp 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.| 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 Pattern Recognition module to use different Pattern Recognition models to time the market across multiple global exchanges.
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