Correlation Between Lepanto Consolidated and 8990 Holdings
Can any of the company-specific risk be diversified away by investing in both Lepanto Consolidated and 8990 Holdings 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 8990 Holdings 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 8990 Holdings, you can compare the effects of market volatilities on Lepanto Consolidated and 8990 Holdings 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 8990 Holdings. Check out your portfolio center. Please also check ongoing floating volatility patterns of Lepanto Consolidated and 8990 Holdings.
Diversification Opportunities for Lepanto Consolidated and 8990 Holdings
-0.32 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Lepanto and 8990 is -0.32. Overlapping area represents the amount of risk that can be diversified away by holding Lepanto Consolidated Mining and 8990 Holdings in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on 8990 Holdings 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 8990 Holdings. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of 8990 Holdings has no effect on the direction of Lepanto Consolidated i.e., Lepanto Consolidated and 8990 Holdings go up and down completely randomly.
Pair Corralation between Lepanto Consolidated and 8990 Holdings
Assuming the 90 days trading horizon Lepanto Consolidated Mining is not expected to generate positive returns. Moreover, Lepanto Consolidated is 1.29 times more volatile than 8990 Holdings. It trades away all of its potential returns to assume current level of volatility. 8990 Holdings is currently generating about 0.0 per unit of risk. If you would invest 11.00 in Lepanto Consolidated Mining on November 27, 2024 and sell it today you would lose (2.30) from holding Lepanto Consolidated Mining or give up 20.91% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 81.29% |
| Values | Daily Returns |
Lepanto Consolidated Mining vs. 8990 Holdings
Performance |
| Timeline |
| Lepanto Consolidated |
| 8990 Holdings |
Lepanto Consolidated and 8990 Holdings Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Lepanto Consolidated and 8990 Holdings
The main advantage of trading using opposite Lepanto Consolidated and 8990 Holdings positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Lepanto Consolidated position performs unexpectedly, 8990 Holdings 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 8990 Holdings will offset losses from the drop in 8990 Holdings' long position.| Lepanto Consolidated vs. COL Financial Group | Lepanto Consolidated vs. Jollibee Foods Corp | Lepanto Consolidated vs. Crown Asia Chemicals | Lepanto Consolidated vs. Bank of the |
| 8990 Holdings vs. Top Frontier Investment | 8990 Holdings vs. Sun Life Financial | 8990 Holdings vs. Union Bank of | 8990 Holdings 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 Rebalancing module to analyze risk-adjusted returns against different time horizons to find asset-allocation targets.
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