Correlation Between Lepanto Consolidated and Converge Information
Can any of the company-specific risk be diversified away by investing in both Lepanto Consolidated and Converge Information 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 Converge Information 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 Converge Information Communications, you can compare the effects of market volatilities on Lepanto Consolidated and Converge Information 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 Converge Information. Check out your portfolio center. Please also check ongoing floating volatility patterns of Lepanto Consolidated and Converge Information.
Diversification Opportunities for Lepanto Consolidated and Converge Information
-0.2 | Correlation Coefficient |
Good diversification
The 3 months correlation between Lepanto and Converge is -0.2. Overlapping area represents the amount of risk that can be diversified away by holding Lepanto Consolidated Mining and Converge Information Communica in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Converge Information 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 Converge Information. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Converge Information has no effect on the direction of Lepanto Consolidated i.e., Lepanto Consolidated and Converge Information go up and down completely randomly.
Pair Corralation between Lepanto Consolidated and Converge Information
Assuming the 90 days trading horizon Lepanto Consolidated is expected to generate 1.63 times less return on investment than Converge Information. In addition to that, Lepanto Consolidated is 1.54 times more volatile than Converge Information Communications. It trades about 0.03 of its total potential returns per unit of risk. Converge Information Communications is currently generating about 0.08 per unit of volatility. If you would invest 1,472 in Converge Information Communications on November 2, 2024 and sell it today you would earn a total of 238.00 from holding Converge Information Communications or generate 16.17% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 99.01% |
| Values | Daily Returns |
Lepanto Consolidated Mining vs. Converge Information Communica
Performance |
| Timeline |
| Lepanto Consolidated |
| Converge Information |
Lepanto Consolidated and Converge Information Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Lepanto Consolidated and Converge Information
The main advantage of trading using opposite Lepanto Consolidated and Converge Information positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Lepanto Consolidated position performs unexpectedly, Converge Information 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 Converge Information will offset losses from the drop in Converge Information's long position.| Lepanto Consolidated vs. Converge Information Communications | Lepanto Consolidated vs. Concepcion Industrial Corp | Lepanto Consolidated vs. Jollibee Foods Corp | Lepanto Consolidated vs. Figaro Coffee Group |
| Converge Information vs. Philex Mining Corp | Converge Information vs. Lepanto Consolidated Mining | Converge Information vs. Security Bank Corp | Converge Information vs. National Reinsurance |
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 AI Portfolio Architect module to use AI to generate optimal portfolios and find profitable investment opportunities.
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