Correlation Between Rizal Commercial and LFM Properties
Can any of the company-specific risk be diversified away by investing in both Rizal Commercial 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 Rizal Commercial and LFM Properties into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Rizal Commercial Banking and LFM Properties Corp, you can compare the effects of market volatilities on Rizal Commercial 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 Rizal Commercial with a short position of LFM Properties. Check out your portfolio center. Please also check ongoing floating volatility patterns of Rizal Commercial and LFM Properties.
Diversification Opportunities for Rizal Commercial and LFM Properties
-0.23 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Rizal and LFM is -0.23. Overlapping area represents the amount of risk that can be diversified away by holding Rizal Commercial Banking 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 Rizal Commercial 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 Rizal Commercial Banking 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 Rizal Commercial i.e., Rizal Commercial and LFM Properties go up and down completely randomly.
Pair Corralation between Rizal Commercial and LFM Properties
Assuming the 90 days trading horizon Rizal Commercial is expected to generate 4.55 times less return on investment than LFM Properties. But when comparing it to its historical volatility, Rizal Commercial Banking is 4.76 times less risky than LFM Properties. It trades about 0.02 of its potential returns per unit of risk. LFM Properties Corp is currently generating about 0.02 of returns per unit of risk over similar time horizon. If you would invest 8.70 in LFM Properties Corp on August 31, 2024 and sell it today you would lose (3.60) from holding LFM Properties Corp or give up 41.38% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 61.16% |
| Values | Daily Returns |
Rizal Commercial Banking vs. LFM Properties Corp
Performance |
| Timeline |
| Rizal Commercial Banking |
| LFM Properties Corp |
Rizal Commercial and LFM Properties Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Rizal Commercial and LFM Properties
The main advantage of trading using opposite Rizal Commercial and LFM Properties positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Rizal Commercial 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.| Rizal Commercial vs. Bank of the | Rizal Commercial vs. Bank of Commerce | Rizal Commercial vs. GT Capital Holdings | Rizal Commercial vs. Allhome Corp |
| LFM Properties vs. Security Bank Corp | LFM Properties vs. Pacificonline Systems | LFM Properties vs. Top Frontier Investment | LFM Properties vs. SM Investments 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 Sign In To Macroaxis module to sign in to explore Macroaxis' wealth optimization platform and fintech modules.
Other Complementary Tools
| Financial Widgets Easily integrated Macroaxis content with over 30 different plug-and-play financial widgets | |
| Aroon Oscillator Analyze current equity momentum using Aroon Oscillator and other momentum ratios | |
| Odds Of Bankruptcy Get analysis of equity chance of financial distress in the next 2 years | |
| Portfolio Analyzer Portfolio analysis module that provides access to portfolio diagnostics and optimization engine | |
| Positions Ratings Determine portfolio positions ratings based on digital equity recommendations. Macroaxis instant position ratings are based on combination of fundamental analysis and risk-adjusted market performance |