Correlation Between LFM Properties and Alliance Global
Can any of the company-specific risk be diversified away by investing in both LFM Properties and Alliance Global 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 LFM Properties and Alliance Global into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between LFM Properties Corp and Alliance Global Group, you can compare the effects of market volatilities on LFM Properties and Alliance Global 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 LFM Properties with a short position of Alliance Global. Check out your portfolio center. Please also check ongoing floating volatility patterns of LFM Properties and Alliance Global.
Diversification Opportunities for LFM Properties and Alliance Global
0.16 | Correlation Coefficient |
Average diversification
The 3 months correlation between LFM and Alliance is 0.16. Overlapping area represents the amount of risk that can be diversified away by holding LFM Properties Corp and Alliance Global Group in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Alliance Global Group and LFM Properties 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 LFM Properties Corp are associated (or correlated) with Alliance Global. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Alliance Global Group has no effect on the direction of LFM Properties i.e., LFM Properties and Alliance Global go up and down completely randomly.
Pair Corralation between LFM Properties and Alliance Global
Assuming the 90 days trading horizon LFM Properties Corp is expected to under-perform the Alliance Global. In addition to that, LFM Properties is 5.79 times more volatile than Alliance Global Group. It trades about -0.09 of its total potential returns per unit of risk. Alliance Global Group is currently generating about -0.17 per unit of volatility. If you would invest 921.00 in Alliance Global Group on September 1, 2024 and sell it today you would lose (43.00) from holding Alliance Global Group or give up 4.67% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 59.09% |
| Values | Daily Returns |
LFM Properties Corp vs. Alliance Global Group
Performance |
| Timeline |
| LFM Properties Corp |
| Alliance Global Group |
LFM Properties and Alliance Global Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with LFM Properties and Alliance Global
The main advantage of trading using opposite LFM Properties and Alliance Global positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if LFM Properties position performs unexpectedly, Alliance Global 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 Alliance Global will offset losses from the drop in Alliance Global's long position.| LFM Properties vs. Concepcion Industrial Corp | LFM Properties vs. Apex Mining Co | LFM Properties vs. Metropolitan Bank Trust | LFM Properties vs. Philex Mining Corp |
| Alliance Global vs. GT Capital Holdings | Alliance Global vs. Allhome Corp | Alliance Global vs. Jollibee Foods Corp | Alliance Global vs. LFM Properties Corp |
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 Idea Breakdown module to analyze constituents of all Macroaxis ideas. Macroaxis investment ideas are predefined, sector-focused investing themes.
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