Correlation Between LFM Properties and Benguet Corp
Can any of the company-specific risk be diversified away by investing in both LFM Properties and Benguet 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 LFM Properties and Benguet Corp 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 Benguet Corp A, you can compare the effects of market volatilities on LFM Properties and Benguet 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 LFM Properties with a short position of Benguet Corp. Check out your portfolio center. Please also check ongoing floating volatility patterns of LFM Properties and Benguet Corp.
Diversification Opportunities for LFM Properties and Benguet Corp
-0.12 | Correlation Coefficient |
Good diversification
The 3 months correlation between LFM and Benguet is -0.12. Overlapping area represents the amount of risk that can be diversified away by holding LFM Properties Corp and Benguet Corp A in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Benguet Corp A 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 Benguet Corp. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Benguet Corp A has no effect on the direction of LFM Properties i.e., LFM Properties and Benguet Corp go up and down completely randomly.
Pair Corralation between LFM Properties and Benguet Corp
Assuming the 90 days trading horizon LFM Properties is expected to generate 2.63 times less return on investment than Benguet Corp. In addition to that, LFM Properties is 1.7 times more volatile than Benguet Corp A. It trades about 0.01 of its total potential returns per unit of risk. Benguet Corp A is currently generating about 0.04 per unit of volatility. If you would invest 375.00 in Benguet Corp A on August 28, 2024 and sell it today you would earn a total of 5.00 from holding Benguet Corp A or generate 1.33% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 63.16% |
| Values | Daily Returns |
LFM Properties Corp vs. Benguet Corp A
Performance |
| Timeline |
| LFM Properties Corp |
| Benguet Corp A |
LFM Properties and Benguet Corp Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with LFM Properties and Benguet Corp
The main advantage of trading using opposite LFM Properties and Benguet Corp positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if LFM Properties position performs unexpectedly, Benguet 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 Benguet Corp will offset losses from the drop in Benguet Corp's long position.| LFM Properties vs. SM Investments Corp | LFM Properties vs. San Miguel Pure | LFM Properties vs. Ayala Corp | LFM Properties vs. BDO Unibank |
| Benguet Corp vs. Bank of the | Benguet Corp vs. Philex Mining Corp | Benguet Corp vs. Robinsons Retail Holdings | Benguet Corp vs. Philippine Business Bank |
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 Bollinger Bands module to use Bollinger Bands indicator to analyze target price for a given investing horizon.
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