Correlation Between Lepanto Consolidated and East West
Can any of the company-specific risk be diversified away by investing in both Lepanto Consolidated and East West 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 East West 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 East West Banking, you can compare the effects of market volatilities on Lepanto Consolidated and East West 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 East West. Check out your portfolio center. Please also check ongoing floating volatility patterns of Lepanto Consolidated and East West.
Diversification Opportunities for Lepanto Consolidated and East West
0.4 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Lepanto and East is 0.4. Overlapping area represents the amount of risk that can be diversified away by holding Lepanto Consolidated Mining and East West Banking in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on East West Banking 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 East West. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of East West Banking has no effect on the direction of Lepanto Consolidated i.e., Lepanto Consolidated and East West go up and down completely randomly.
Pair Corralation between Lepanto Consolidated and East West
Assuming the 90 days trading horizon Lepanto Consolidated Mining is expected to under-perform the East West. In addition to that, Lepanto Consolidated is 2.63 times more volatile than East West Banking. It trades about -0.02 of its total potential returns per unit of risk. East West Banking is currently generating about 0.08 per unit of volatility. If you would invest 660.00 in East West Banking on October 23, 2024 and sell it today you would earn a total of 339.00 from holding East West Banking or generate 51.36% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 96.66% |
| Values | Daily Returns |
Lepanto Consolidated Mining vs. East West Banking
Performance |
| Timeline |
| Lepanto Consolidated |
| East West Banking |
Lepanto Consolidated and East West Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Lepanto Consolidated and East West
The main advantage of trading using opposite Lepanto Consolidated and East West positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Lepanto Consolidated position performs unexpectedly, East West 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 East West will offset losses from the drop in East West's long position.| Lepanto Consolidated vs. Semirara Mining Corp | Lepanto Consolidated vs. Bank of the | Lepanto Consolidated vs. Cebu Air Preferred | Lepanto Consolidated vs. Asia United Bank |
| East West vs. BDO Unibank | East West vs. Metropolitan Bank Trust | East West vs. Security Bank Corp | East West vs. Union Bank of |
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 Sync Your Broker module to sync your existing holdings, watchlists, positions or portfolios from thousands of online brokerage services, banks, investment account aggregators and robo-advisors..
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