Correlation Between Filinvest REIT and Semirara Mining

Can any of the company-specific risk be diversified away by investing in both Filinvest REIT and Semirara Mining 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 Semirara Mining 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 Semirara Mining Corp, you can compare the effects of market volatilities on Filinvest REIT and Semirara Mining 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 Semirara Mining. Check out your portfolio center. Please also check ongoing floating volatility patterns of Filinvest REIT and Semirara Mining.

Diversification Opportunities for Filinvest REIT and Semirara Mining

-0.25

Correlation Coefficient

Filinvest REIT  Semirara Mining

Very good diversification

The 3 months correlation between Filinvest and Semirara is -0.25. Overlapping area represents the amount of risk that can be diversified away by holding Filinvest REIT Corp and Semirara Mining Corp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Semirara Mining Corp 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 Semirara Mining. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Semirara Mining Corp has no effect on the direction of Filinvest REIT i.e., Filinvest REIT and Semirara Mining go up and down completely randomly.

Pair Corralation between Filinvest REIT and Semirara Mining

Assuming the 90 days trading horizon Filinvest REIT Corp is expected to under-perform the Semirara Mining. But the stock apears to be less risky and, when comparing its historical volatility, Filinvest REIT Corp is 1.56 times less risky than Semirara Mining. The stock trades about -0.02 of its potential returns per unit of risk. The Semirara Mining Corp is currently generating about 0.2 of returns per unit of risk over similar time horizon. If you would invest  3,171  in Semirara Mining Corp on October 23, 2024 and sell it today you would earn a total of  434.00  from holding Semirara Mining Corp or generate 13.69% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Insignificant
Accuracy	100.0%
Values	Daily Returns

Filinvest REIT Corp  vs.  Semirara Mining Corp

Filinvest REIT Corp

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Filinvest REIT Corp has generated negative risk-adjusted returns adding no value to investors with long positions. Even with relatively invariable essential indicators, Filinvest REIT is not utilizing all of its potentials. The latest stock price agitation, may contribute to short-term losses for the retail investors.

Semirara Mining Corp

Risk-Adjusted Performance

15 of 100

Good

Compared to the overall equity markets, risk-adjusted returns on investments in Semirara Mining Corp are ranked lower than 15 (%) of all global equities and portfolios over the last 90 days. In spite of rather weak technical and fundamental indicators, Semirara Mining exhibited solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Filinvest REIT and Semirara Mining

The main advantage of trading using opposite Filinvest REIT and Semirara Mining positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Filinvest REIT position performs unexpectedly, Semirara Mining 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 Semirara Mining will offset losses from the drop in Semirara Mining's long position.

The idea behind Filinvest REIT Corp and Semirara Mining Corp pairs trading is to make the combined position market-neutral, meaning the overall market's direction will not affect its win or loss (or potential downside or upside). This can be achieved by designing a pairs trade with two highly correlated stocks or equities that operate in a similar space or sector, making it possible to obtain profits through simple and relatively low-risk investment.

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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 Pair Correlation module to compare performance and examine fundamental relationship between any two equity instruments.