Correlation Between Lepanto Consolidated and PHINMA Corp
Can any of the company-specific risk be diversified away by investing in both Lepanto Consolidated and PHINMA 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 PHINMA 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 PHINMA Corp, you can compare the effects of market volatilities on Lepanto Consolidated and PHINMA 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 PHINMA Corp. Check out your portfolio center. Please also check ongoing floating volatility patterns of Lepanto Consolidated and PHINMA Corp.
Diversification Opportunities for Lepanto Consolidated and PHINMA Corp
0.45 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Lepanto and PHINMA is 0.45. Overlapping area represents the amount of risk that can be diversified away by holding Lepanto Consolidated Mining and PHINMA Corp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on PHINMA 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 PHINMA Corp. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of PHINMA Corp has no effect on the direction of Lepanto Consolidated i.e., Lepanto Consolidated and PHINMA Corp go up and down completely randomly.
Pair Corralation between Lepanto Consolidated and PHINMA Corp
Assuming the 90 days trading horizon Lepanto Consolidated Mining is expected to under-perform the PHINMA Corp. In addition to that, Lepanto Consolidated is 2.28 times more volatile than PHINMA Corp. It trades about -0.19 of its total potential returns per unit of risk. PHINMA Corp is currently generating about -0.07 per unit of volatility. If you would invest 1,996 in PHINMA Corp on September 13, 2024 and sell it today you would lose (56.00) from holding PHINMA Corp or give up 2.81% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 90.48% |
| Values | Daily Returns |
Lepanto Consolidated Mining vs. PHINMA Corp
Performance |
| Timeline |
| Lepanto Consolidated |
| PHINMA Corp |
Lepanto Consolidated and PHINMA Corp Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Lepanto Consolidated and PHINMA Corp
The main advantage of trading using opposite Lepanto Consolidated and PHINMA Corp positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Lepanto Consolidated position performs unexpectedly, PHINMA 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 PHINMA Corp will offset losses from the drop in PHINMA Corp's long position.| Lepanto Consolidated vs. Atlas Consolidated Mining | Lepanto Consolidated vs. Jollibee Foods Corp | Lepanto Consolidated vs. Converge Information Communications | Lepanto Consolidated vs. House of Investments |
| PHINMA Corp vs. Apex Mining Co | PHINMA Corp vs. Security Bank Corp | PHINMA Corp vs. Century Pacific Food | PHINMA Corp vs. Lepanto Consolidated Mining |
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 Earnings Calls module to check upcoming earnings announcements updated hourly across public exchanges.
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