Correlation Between LFM Properties and Swift Foods
Can any of the company-specific risk be diversified away by investing in both LFM Properties and Swift Foods 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 Swift Foods 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 Swift Foods, you can compare the effects of market volatilities on LFM Properties and Swift Foods 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 Swift Foods. Check out your portfolio center. Please also check ongoing floating volatility patterns of LFM Properties and Swift Foods.
Diversification Opportunities for LFM Properties and Swift Foods
0.26 | Correlation Coefficient |
Modest diversification
The 3 months correlation between LFM and Swift is 0.26. Overlapping area represents the amount of risk that can be diversified away by holding LFM Properties Corp and Swift Foods in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Swift Foods 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 Swift Foods. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Swift Foods has no effect on the direction of LFM Properties i.e., LFM Properties and Swift Foods go up and down completely randomly.
Pair Corralation between LFM Properties and Swift Foods
Assuming the 90 days trading horizon LFM Properties Corp is expected to generate 2.11 times more return on investment than Swift Foods. However, LFM Properties is 2.11 times more volatile than Swift Foods. It trades about 0.06 of its potential returns per unit of risk. Swift Foods is currently generating about 0.01 per unit of risk. If you would invest 5.00 in LFM Properties Corp on September 1, 2024 and sell it today you would earn a total of 0.10 from holding LFM Properties Corp or generate 2.0% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 65.84% |
| Values | Daily Returns |
LFM Properties Corp vs. Swift Foods
Performance |
| Timeline |
| LFM Properties Corp |
| Swift Foods |
LFM Properties and Swift Foods Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with LFM Properties and Swift Foods
The main advantage of trading using opposite LFM Properties and Swift Foods positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if LFM Properties position performs unexpectedly, Swift Foods 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 Swift Foods will offset losses from the drop in Swift Foods' 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 |
| Swift Foods vs. Metro Retail Stores | Swift Foods vs. Century Pacific Food | Swift Foods vs. Manila Mining Corp | Swift Foods vs. Apex Mining Co |
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 Share Portfolio module to track or share privately all of your investments from the convenience of any device.
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