Correlation Between LFM Properties and Dizon Copper
Can any of the company-specific risk be diversified away by investing in both LFM Properties and Dizon Copper 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 Dizon Copper 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 Dizon Copper Silver, you can compare the effects of market volatilities on LFM Properties and Dizon Copper 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 Dizon Copper. Check out your portfolio center. Please also check ongoing floating volatility patterns of LFM Properties and Dizon Copper.
Diversification Opportunities for LFM Properties and Dizon Copper
0.04 | Correlation Coefficient |
Significant diversification
The 3 months correlation between LFM and Dizon is 0.04. Overlapping area represents the amount of risk that can be diversified away by holding LFM Properties Corp and Dizon Copper Silver in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Dizon Copper Silver 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 Dizon Copper. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Dizon Copper Silver has no effect on the direction of LFM Properties i.e., LFM Properties and Dizon Copper go up and down completely randomly.
Pair Corralation between LFM Properties and Dizon Copper
Assuming the 90 days trading horizon LFM Properties Corp is expected to generate 2.55 times more return on investment than Dizon Copper. However, LFM Properties is 2.55 times more volatile than Dizon Copper Silver. It trades about 0.01 of its potential returns per unit of risk. Dizon Copper Silver is currently generating about -0.76 per unit of risk. If you would invest 5.70 in LFM Properties Corp on August 28, 2024 and sell it today you would lose (0.10) from holding LFM Properties Corp or give up 1.75% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 50.0% |
| Values | Daily Returns |
LFM Properties Corp vs. Dizon Copper Silver
Performance |
| Timeline |
| LFM Properties Corp |
| Dizon Copper Silver |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Very Weak
LFM Properties and Dizon Copper Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with LFM Properties and Dizon Copper
The main advantage of trading using opposite LFM Properties and Dizon Copper positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if LFM Properties position performs unexpectedly, Dizon Copper 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 Dizon Copper will offset losses from the drop in Dizon Copper'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 |
| Dizon Copper vs. Figaro Coffee Group | Dizon Copper vs. Alliance Select Foods | Dizon Copper vs. SM Investments Corp | Dizon Copper vs. Premiere Entertainment |
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 Global Correlations module to find global opportunities by holding instruments from different markets.
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