Correlation Between Lepanto Consolidated and EEI Corp
Can any of the company-specific risk be diversified away by investing in both Lepanto Consolidated and EEI 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 EEI 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 EEI Corp, you can compare the effects of market volatilities on Lepanto Consolidated and EEI 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 EEI Corp. Check out your portfolio center. Please also check ongoing floating volatility patterns of Lepanto Consolidated and EEI Corp.
Diversification Opportunities for Lepanto Consolidated and EEI Corp
-0.02 | Correlation Coefficient |
Good diversification
The 3 months correlation between Lepanto and EEI is -0.02. Overlapping area represents the amount of risk that can be diversified away by holding Lepanto Consolidated Mining and EEI Corp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on EEI Corp 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 EEI Corp. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of EEI Corp has no effect on the direction of Lepanto Consolidated i.e., Lepanto Consolidated and EEI Corp go up and down completely randomly.
Pair Corralation between Lepanto Consolidated and EEI Corp
Assuming the 90 days trading horizon Lepanto Consolidated Mining is expected to under-perform the EEI Corp. In addition to that, Lepanto Consolidated is 1.14 times more volatile than EEI Corp. It trades about -0.01 of its total potential returns per unit of risk. EEI Corp is currently generating about 0.03 per unit of volatility. If you would invest 285.00 in EEI Corp on September 14, 2024 and sell it today you would earn a total of 75.00 from holding EEI Corp or generate 26.32% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 96.88% |
| Values | Daily Returns |
Lepanto Consolidated Mining vs. EEI Corp
Performance |
| Timeline |
| Lepanto Consolidated |
| EEI Corp |
Lepanto Consolidated and EEI Corp Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Lepanto Consolidated and EEI Corp
The main advantage of trading using opposite Lepanto Consolidated and EEI Corp positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Lepanto Consolidated position performs unexpectedly, EEI 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 EEI Corp will offset losses from the drop in EEI Corp's long position.| Lepanto Consolidated vs. Top Frontier Investment | Lepanto Consolidated vs. Robinsons Retail Holdings | Lepanto Consolidated vs. SM Investments Corp | Lepanto Consolidated vs. House of Investments |
| EEI Corp vs. Philex Mining Corp | EEI Corp vs. National Reinsurance | EEI Corp vs. Rizal Commercial Banking | EEI Corp vs. Apex Mining Co |
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 Portfolio Manager module to state of the art Portfolio Manager to monitor and improve performance of your invested capital.
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