Correlation Between Monde Nissin and LFM Properties
Can any of the company-specific risk be diversified away by investing in both Monde Nissin and LFM Properties 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 Monde Nissin and LFM Properties into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Monde Nissin Corp and LFM Properties Corp, you can compare the effects of market volatilities on Monde Nissin and LFM Properties 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 Monde Nissin with a short position of LFM Properties. Check out your portfolio center. Please also check ongoing floating volatility patterns of Monde Nissin and LFM Properties.
Diversification Opportunities for Monde Nissin and LFM Properties
-0.25 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Monde and LFM is -0.25. Overlapping area represents the amount of risk that can be diversified away by holding Monde Nissin Corp and LFM Properties Corp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on LFM Properties Corp and Monde Nissin 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 Monde Nissin Corp are associated (or correlated) with LFM Properties. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of LFM Properties Corp has no effect on the direction of Monde Nissin i.e., Monde Nissin and LFM Properties go up and down completely randomly.
Pair Corralation between Monde Nissin and LFM Properties
Assuming the 90 days trading horizon Monde Nissin Corp is expected to under-perform the LFM Properties. But the stock apears to be less risky and, when comparing its historical volatility, Monde Nissin Corp is 2.57 times less risky than LFM Properties. The stock trades about -0.28 of its potential returns per unit of risk. The LFM Properties Corp is currently generating about -0.05 of returns per unit of risk over similar time horizon. 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 |
Monde Nissin Corp vs. LFM Properties Corp
Performance |
| Timeline |
| Monde Nissin Corp |
| LFM Properties Corp |
Monde Nissin and LFM Properties Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Monde Nissin and LFM Properties
The main advantage of trading using opposite Monde Nissin and LFM Properties positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Monde Nissin position performs unexpectedly, LFM Properties 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 LFM Properties will offset losses from the drop in LFM Properties' long position.| Monde Nissin vs. Union Bank of | Monde Nissin vs. Apex Mining Co | Monde Nissin vs. COL Financial Group | Monde Nissin vs. Atlas Consolidated Mining |
| LFM Properties vs. SM Investments Corp | LFM Properties vs. San Miguel Pure | LFM Properties vs. Ayala Corp | LFM Properties vs. BDO Unibank |
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 Fundamentals Comparison module to compare fundamentals across multiple equities to find investing opportunities.
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