Correlation Between Filinvest REIT and Lepanto Consolidated
Can any of the company-specific risk be diversified away by investing in both Filinvest REIT and Lepanto Consolidated 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 Filinvest REIT and Lepanto Consolidated into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Filinvest REIT Corp and Lepanto Consolidated Mining, you can compare the effects of market volatilities on Filinvest REIT and Lepanto Consolidated 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 Filinvest REIT with a short position of Lepanto Consolidated. Check out your portfolio center. Please also check ongoing floating volatility patterns of Filinvest REIT and Lepanto Consolidated.
Diversification Opportunities for Filinvest REIT and Lepanto Consolidated
0.11 | Correlation Coefficient |
Average diversification
The 3 months correlation between Filinvest and Lepanto is 0.11. Overlapping area represents the amount of risk that can be diversified away by holding Filinvest REIT Corp and Lepanto Consolidated Mining in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Lepanto Consolidated and Filinvest REIT 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 Filinvest REIT Corp are associated (or correlated) with Lepanto Consolidated. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Lepanto Consolidated has no effect on the direction of Filinvest REIT i.e., Filinvest REIT and Lepanto Consolidated go up and down completely randomly.
Pair Corralation between Filinvest REIT and Lepanto Consolidated
Assuming the 90 days trading horizon Filinvest REIT Corp is expected to generate 0.33 times more return on investment than Lepanto Consolidated. However, Filinvest REIT Corp is 3.05 times less risky than Lepanto Consolidated. It trades about 0.04 of its potential returns per unit of risk. Lepanto Consolidated Mining is currently generating about -0.01 per unit of risk. If you would invest 268.00 in Filinvest REIT Corp on September 24, 2024 and sell it today you would earn a total of 18.00 from holding Filinvest REIT Corp or generate 6.72% return on investment over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Together |
Strength | Insignificant |
Accuracy | 79.88% |
Values | Daily Returns |
Filinvest REIT Corp vs. Lepanto Consolidated Mining
Performance |
Timeline |
Filinvest REIT Corp |
Lepanto Consolidated |
Filinvest REIT and Lepanto Consolidated Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with Filinvest REIT and Lepanto Consolidated
The main advantage of trading using opposite Filinvest REIT and Lepanto Consolidated positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Filinvest REIT position performs unexpectedly, Lepanto Consolidated 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 Lepanto Consolidated will offset losses from the drop in Lepanto Consolidated's long position.Filinvest REIT vs. AyalaLand REIT | Filinvest REIT vs. DDMP REIT | Filinvest REIT vs. Century Pacific Food | Filinvest REIT vs. RFM Corp |
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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 Portfolio Optimization module to compute new portfolio that will generate highest expected return given your specified tolerance for risk.
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