Correlation Between LFM Properties and Monde Nissin
Can any of the company-specific risk be diversified away by investing in both LFM Properties and Monde Nissin 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 Monde Nissin 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 Monde Nissin Corp, you can compare the effects of market volatilities on LFM Properties and Monde Nissin 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 Monde Nissin. Check out your portfolio center. Please also check ongoing floating volatility patterns of LFM Properties and Monde Nissin.
Diversification Opportunities for LFM Properties and Monde Nissin
-0.25 | Correlation Coefficient |
Very good diversification
The 3 months correlation between LFM and Monde is -0.25. Overlapping area represents the amount of risk that can be diversified away by holding LFM Properties Corp and Monde Nissin Corp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Monde Nissin Corp 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 Monde Nissin. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Monde Nissin Corp has no effect on the direction of LFM Properties i.e., LFM Properties and Monde Nissin go up and down completely randomly.
Pair Corralation between LFM Properties and Monde Nissin
Assuming the 90 days trading horizon LFM Properties Corp is expected to generate 2.57 times more return on investment than Monde Nissin. However, LFM Properties is 2.57 times more volatile than Monde Nissin Corp. It trades about -0.05 of its potential returns per unit of risk. Monde Nissin Corp is currently generating about -0.28 per unit of risk. If you would invest 6.00 in LFM Properties Corp on August 25, 2024 and sell it today you would lose (0.40) from holding LFM Properties Corp or give up 6.67% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 66.67% |
| Values | Daily Returns |
LFM Properties Corp vs. Monde Nissin Corp
Performance |
| Timeline |
| LFM Properties Corp |
| Monde Nissin Corp |
LFM Properties and Monde Nissin Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with LFM Properties and Monde Nissin
The main advantage of trading using opposite LFM Properties and Monde Nissin positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if LFM Properties position performs unexpectedly, Monde Nissin 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 Monde Nissin will offset losses from the drop in Monde Nissin'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 |
| Monde Nissin vs. Union Bank of | Monde Nissin vs. Apex Mining Co | Monde Nissin vs. COL Financial Group | Monde Nissin vs. Atlas Consolidated Mining |
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 Transaction History module to view history of all your transactions and understand their impact on performance.
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