Correlation Between Lepanto Consolidated and COL Financial
Can any of the company-specific risk be diversified away by investing in both Lepanto Consolidated and COL Financial 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 COL Financial 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 COL Financial Group, you can compare the effects of market volatilities on Lepanto Consolidated and COL Financial 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 COL Financial. Check out your portfolio center. Please also check ongoing floating volatility patterns of Lepanto Consolidated and COL Financial.
Diversification Opportunities for Lepanto Consolidated and COL Financial
0.86 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between Lepanto and COL is 0.86. Overlapping area represents the amount of risk that can be diversified away by holding Lepanto Consolidated Mining and COL Financial Group in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on COL Financial Group 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 COL Financial. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of COL Financial Group has no effect on the direction of Lepanto Consolidated i.e., Lepanto Consolidated and COL Financial go up and down completely randomly.
Pair Corralation between Lepanto Consolidated and COL Financial
Assuming the 90 days trading horizon Lepanto Consolidated is expected to generate 8.36 times less return on investment than COL Financial. In addition to that, Lepanto Consolidated is 2.01 times more volatile than COL Financial Group. It trades about 0.01 of its total potential returns per unit of risk. COL Financial Group is currently generating about 0.23 per unit of volatility. If you would invest 164.00 in COL Financial Group on October 24, 2024 and sell it today you would earn a total of 9.00 from holding COL Financial Group or generate 5.49% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Lepanto Consolidated Mining vs. COL Financial Group
Performance |
| Timeline |
| Lepanto Consolidated |
| COL Financial Group |
Lepanto Consolidated and COL Financial Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Lepanto Consolidated and COL Financial
The main advantage of trading using opposite Lepanto Consolidated and COL Financial positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Lepanto Consolidated position performs unexpectedly, COL Financial 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 COL Financial will offset losses from the drop in COL Financial's long position.| Lepanto Consolidated vs. Metropolitan Bank Trust | Lepanto Consolidated vs. Apex Mining Co | Lepanto Consolidated vs. Rizal Commercial Banking | Lepanto Consolidated vs. Semirara Mining Corp |
| COL Financial vs. Century Pacific Food | COL Financial vs. Lepanto Consolidated Mining | COL Financial vs. Rizal Commercial Banking | COL Financial vs. Philippine Business Bank |
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 Stocks Directory module to find actively traded stocks across global markets.
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