Correlation Between LFM Properties and Wilcon Depot
Can any of the company-specific risk be diversified away by investing in both LFM Properties and Wilcon Depot 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 Wilcon Depot 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 Wilcon Depot, you can compare the effects of market volatilities on LFM Properties and Wilcon Depot 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 Wilcon Depot. Check out your portfolio center. Please also check ongoing floating volatility patterns of LFM Properties and Wilcon Depot.
Diversification Opportunities for LFM Properties and Wilcon Depot
0.46 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between LFM and Wilcon is 0.46. Overlapping area represents the amount of risk that can be diversified away by holding LFM Properties Corp and Wilcon Depot in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Wilcon Depot 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 Wilcon Depot. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Wilcon Depot has no effect on the direction of LFM Properties i.e., LFM Properties and Wilcon Depot go up and down completely randomly.
Pair Corralation between LFM Properties and Wilcon Depot
Assuming the 90 days trading horizon LFM Properties Corp is expected to generate 2.96 times more return on investment than Wilcon Depot. However, LFM Properties is 2.96 times more volatile than Wilcon Depot. It trades about -0.09 of its potential returns per unit of risk. Wilcon Depot is currently generating about -0.32 per unit of risk. If you would invest 5.70 in LFM Properties Corp on August 31, 2024 and sell it today you would lose (0.60) from holding LFM Properties Corp or give up 10.53% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 57.14% |
| Values | Daily Returns |
LFM Properties Corp vs. Wilcon Depot
Performance |
| Timeline |
| LFM Properties Corp |
| Wilcon Depot |
LFM Properties and Wilcon Depot Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with LFM Properties and Wilcon Depot
The main advantage of trading using opposite LFM Properties and Wilcon Depot positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if LFM Properties position performs unexpectedly, Wilcon Depot 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 Wilcon Depot will offset losses from the drop in Wilcon Depot's long position.| LFM Properties vs. Security Bank Corp | LFM Properties vs. Pacificonline Systems | LFM Properties vs. Top Frontier Investment | LFM Properties vs. SM Investments Corp |
| Wilcon Depot vs. GT Capital Holdings | Wilcon Depot vs. Allhome Corp | Wilcon Depot vs. Jollibee Foods Corp | Wilcon Depot vs. LFM Properties Corp |
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 Stocks Directory module to find actively traded stocks across global markets.
Other Complementary Tools
| Risk-Return Analysis View associations between returns expected from investment and the risk you assume | |
| Equity Analysis Research over 250,000 global equities including funds, stocks and ETFs to find investment opportunities | |
| Efficient Frontier Plot and analyze your portfolio and positions against risk-return landscape of the market. | |
| Portfolio Anywhere Track or share privately all of your investments from the convenience of any device | |
| Pattern Recognition Use different Pattern Recognition models to time the market across multiple global exchanges |