Correlation Between LFM Properties and Balai Ni
Can any of the company-specific risk be diversified away by investing in both LFM Properties and Balai Ni 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 Balai Ni 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 Balai Ni Fruitas, you can compare the effects of market volatilities on LFM Properties and Balai Ni 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 Balai Ni. Check out your portfolio center. Please also check ongoing floating volatility patterns of LFM Properties and Balai Ni.
Diversification Opportunities for LFM Properties and Balai Ni
0.02 | Correlation Coefficient |
Significant diversification
The 3 months correlation between LFM and Balai is 0.02. Overlapping area represents the amount of risk that can be diversified away by holding LFM Properties Corp and Balai Ni Fruitas in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Balai Ni Fruitas 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 Balai Ni. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Balai Ni Fruitas has no effect on the direction of LFM Properties i.e., LFM Properties and Balai Ni go up and down completely randomly.
Pair Corralation between LFM Properties and Balai Ni
Assuming the 90 days trading horizon LFM Properties Corp is expected to generate 2.85 times more return on investment than Balai Ni. However, LFM Properties is 2.85 times more volatile than Balai Ni Fruitas. It trades about 0.0 of its potential returns per unit of risk. Balai Ni Fruitas is currently generating about -0.02 per unit of risk. If you would invest 16.00 in LFM Properties Corp on August 30, 2024 and sell it today you would lose (10.90) from holding LFM Properties Corp or give up 68.12% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 65.26% |
| Values | Daily Returns |
LFM Properties Corp vs. Balai Ni Fruitas
Performance |
| Timeline |
| LFM Properties Corp |
| Balai Ni Fruitas |
LFM Properties and Balai Ni Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with LFM Properties and Balai Ni
The main advantage of trading using opposite LFM Properties and Balai Ni positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if LFM Properties position performs unexpectedly, Balai Ni 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 Balai Ni will offset losses from the drop in Balai Ni's long position.| LFM Properties vs. Philippine Savings Bank | LFM Properties vs. Metro Retail Stores | LFM Properties vs. Atlas Consolidated Mining | LFM Properties vs. Transpacific Broadband Group |
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 Instant Ratings module to determine any equity ratings based on digital recommendations. Macroaxis instant equity ratings are based on combination of fundamental analysis and risk-adjusted market performance.
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