Correlation Between Figaro Coffee and LFM Properties
Can any of the company-specific risk be diversified away by investing in both Figaro Coffee 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 Figaro Coffee and LFM Properties into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Figaro Coffee Group and LFM Properties Corp, you can compare the effects of market volatilities on Figaro Coffee 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 Figaro Coffee with a short position of LFM Properties. Check out your portfolio center. Please also check ongoing floating volatility patterns of Figaro Coffee and LFM Properties.
Diversification Opportunities for Figaro Coffee and LFM Properties
-0.17 | Correlation Coefficient |
Good diversification
The 3 months correlation between Figaro and LFM is -0.17. Overlapping area represents the amount of risk that can be diversified away by holding Figaro Coffee 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 Figaro Coffee 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 Figaro Coffee 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 Figaro Coffee i.e., Figaro Coffee and LFM Properties go up and down completely randomly.
Pair Corralation between Figaro Coffee and LFM Properties
Assuming the 90 days trading horizon Figaro Coffee Group is expected to generate 0.35 times more return on investment than LFM Properties. However, Figaro Coffee Group is 2.88 times less risky than LFM Properties. It trades about -0.06 of its potential returns per unit of risk. LFM Properties Corp is currently generating about -0.09 per unit of risk. If you would invest 85.00 in Figaro Coffee Group on September 3, 2024 and sell it today you would lose (3.00) from holding Figaro Coffee Group or give up 3.53% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 61.9% |
| Values | Daily Returns |
Figaro Coffee Group vs. LFM Properties Corp
Performance |
| Timeline |
| Figaro Coffee Group |
| LFM Properties Corp |
Figaro Coffee and LFM Properties Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Figaro Coffee and LFM Properties
The main advantage of trading using opposite Figaro Coffee and LFM Properties positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Figaro Coffee 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.| Figaro Coffee vs. Metropolitan Bank Trust | Figaro Coffee vs. Manulife Financial Corp | Figaro Coffee vs. East West Banking | Figaro Coffee vs. COL Financial Group |
| LFM Properties vs. SM Investments Corp | LFM Properties vs. San Miguel Pure | LFM Properties vs. Ayala Corp | LFM Properties vs. Ayala Land |
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.
Other Complementary Tools
| Top Crypto Exchanges Search and analyze digital assets across top global cryptocurrency exchanges | |
| Bonds Directory Find actively traded corporate debentures issued by US companies | |
| Portfolio Backtesting Avoid under-diversification and over-optimization by backtesting your portfolios | |
| Portfolio Volatility Check portfolio volatility and analyze historical return density to properly model market risk | |
| Portfolio Optimization Compute new portfolio that will generate highest expected return given your specified tolerance for risk |