Correlation Between LFM Properties and Medco Holdings
Can any of the company-specific risk be diversified away by investing in both LFM Properties and Medco Holdings 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 Medco Holdings 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 Medco Holdings, you can compare the effects of market volatilities on LFM Properties and Medco Holdings 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 Medco Holdings. Check out your portfolio center. Please also check ongoing floating volatility patterns of LFM Properties and Medco Holdings.
Diversification Opportunities for LFM Properties and Medco Holdings
0.5 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between LFM and Medco is 0.5. Overlapping area represents the amount of risk that can be diversified away by holding LFM Properties Corp and Medco Holdings in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Medco Holdings 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 Medco Holdings. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Medco Holdings has no effect on the direction of LFM Properties i.e., LFM Properties and Medco Holdings go up and down completely randomly.
Pair Corralation between LFM Properties and Medco Holdings
Assuming the 90 days trading horizon LFM Properties Corp is expected to under-perform the Medco Holdings. In addition to that, LFM Properties is 1.25 times more volatile than Medco Holdings. It trades about -0.09 of its total potential returns per unit of risk. Medco Holdings is currently generating about 0.03 per unit of volatility. If you would invest 12.00 in Medco Holdings on September 1, 2024 and sell it today you would earn a total of 0.00 from holding Medco Holdings or generate 0.0% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 86.67% |
| Values | Daily Returns |
LFM Properties Corp vs. Medco Holdings
Performance |
| Timeline |
| LFM Properties Corp |
| Medco Holdings |
LFM Properties and Medco Holdings Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with LFM Properties and Medco Holdings
The main advantage of trading using opposite LFM Properties and Medco Holdings positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if LFM Properties position performs unexpectedly, Medco Holdings 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 Medco Holdings will offset losses from the drop in Medco Holdings' 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 |
| Medco Holdings vs. Bright Kindle Resources | Medco Holdings vs. Allhome Corp | Medco Holdings vs. LFM Properties Corp | Medco Holdings vs. Altus Property Ventures |
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 Portfolio Dashboard module to portfolio dashboard that provides centralized access to all your investments.
Other Complementary Tools
| Idea Analyzer Analyze all characteristics, volatility and risk-adjusted return of Macroaxis ideas | |
| Commodity Channel Use Commodity Channel Index to analyze current equity momentum | |
| Equity Valuation Check real value of public entities based on technical and fundamental data | |
| Global Correlations Find global opportunities by holding instruments from different markets | |
| ETF Categories List of ETF categories grouped based on various criteria, such as the investment strategy or type of investments |