Correlation Between Lepanto Consolidated and Benguet Corp
Can any of the company-specific risk be diversified away by investing in both Lepanto Consolidated and Benguet Corp 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 Lepanto Consolidated and Benguet Corp into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Lepanto Consolidated Mining and Benguet Corp A, you can compare the effects of market volatilities on Lepanto Consolidated and Benguet Corp 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 Lepanto Consolidated with a short position of Benguet Corp. Check out your portfolio center. Please also check ongoing floating volatility patterns of Lepanto Consolidated and Benguet Corp.
Diversification Opportunities for Lepanto Consolidated and Benguet Corp
0.24 | Correlation Coefficient |
Modest diversification
The 3 months correlation between Lepanto and Benguet is 0.24. Overlapping area represents the amount of risk that can be diversified away by holding Lepanto Consolidated Mining and Benguet Corp A in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Benguet Corp A and Lepanto Consolidated 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 Lepanto Consolidated Mining are associated (or correlated) with Benguet Corp. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Benguet Corp A has no effect on the direction of Lepanto Consolidated i.e., Lepanto Consolidated and Benguet Corp go up and down completely randomly.
Pair Corralation between Lepanto Consolidated and Benguet Corp
Assuming the 90 days trading horizon Lepanto Consolidated Mining is expected to generate 1.4 times more return on investment than Benguet Corp. However, Lepanto Consolidated is 1.4 times more volatile than Benguet Corp A. It trades about 0.12 of its potential returns per unit of risk. Benguet Corp A is currently generating about 0.16 per unit of risk. If you would invest 6.80 in Lepanto Consolidated Mining on December 1, 2024 and sell it today you would earn a total of 0.80 from holding Lepanto Consolidated Mining or generate 11.76% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 95.45% |
| Values | Daily Returns |
Lepanto Consolidated Mining vs. Benguet Corp A
Performance |
| Timeline |
| Lepanto Consolidated |
| Benguet Corp A |
Lepanto Consolidated and Benguet Corp Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Lepanto Consolidated and Benguet Corp
The main advantage of trading using opposite Lepanto Consolidated and Benguet Corp positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Lepanto Consolidated position performs unexpectedly, Benguet Corp 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 Benguet Corp will offset losses from the drop in Benguet Corp's long position.| Lepanto Consolidated vs. Nickel Asia Corp | Lepanto Consolidated vs. Apollo Global Capital | Lepanto Consolidated vs. Atok Big Wedge | Lepanto Consolidated vs. Philex Mining Corp |
| Benguet Corp vs. Nickel Asia Corp | Benguet Corp vs. Apollo Global Capital | Benguet Corp vs. Atok Big Wedge | Benguet Corp vs. Philex Mining Corp |
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 Aroon Oscillator module to analyze current equity momentum using Aroon Oscillator and other momentum ratios.
Other Complementary Tools
| Global Markets Map Get a quick overview of global market snapshot using zoomable world map. Drill down to check world indexes | |
| Correlation Analysis Reduce portfolio risk simply by holding instruments which are not perfectly correlated | |
| Commodity Directory Find actively traded commodities issued by global exchanges | |
| Competition Analyzer Analyze and compare many basic indicators for a group of related or unrelated entities | |
| FinTech Suite Use AI to screen and filter profitable investment opportunities |