Correlation Between Lalin Property and IFS Capital

Can any of the company-specific risk be diversified away by investing in both Lalin Property and IFS Capital 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 Lalin Property and IFS Capital into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between Lalin Property Public and IFS Capital Public, you can compare the effects of market volatilities on Lalin Property and IFS Capital 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 Lalin Property with a short position of IFS Capital. Check out your portfolio center. Please also check ongoing floating volatility patterns of Lalin Property and IFS Capital.

Diversification Opportunities for Lalin Property and IFS Capital

0.57

Correlation Coefficient

Lalin Property  IFS Capital

Very weak diversification

The 3 months correlation between Lalin and IFS is 0.57. Overlapping area represents the amount of risk that can be diversified away by holding Lalin Property Public and IFS Capital Public in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on IFS Capital Public and Lalin Property 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 Lalin Property Public are associated (or correlated) with IFS Capital. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of IFS Capital Public has no effect on the direction of Lalin Property i.e., Lalin Property and IFS Capital go up and down completely randomly.

Pair Corralation between Lalin Property and IFS Capital

Assuming the 90 days trading horizon Lalin Property Public is expected to generate 1.0 times more return on investment than IFS Capital. However, Lalin Property is 1.0 times more volatile than IFS Capital Public. It trades about -0.11 of its potential returns per unit of risk. IFS Capital Public is currently generating about -0.2 per unit of risk. If you would invest  625.00  in Lalin Property Public on September 15, 2024 and sell it today you would lose (10.00) from holding Lalin Property Public or give up 1.6% of portfolio value over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Weak
Accuracy	95.24%
Values	Daily Returns

Lalin Property Public  vs.  IFS Capital Public

Lalin Property Public

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Lalin Property Public has generated negative risk-adjusted returns adding no value to investors with long positions. Despite somewhat strong fundamental drivers, Lalin Property is not utilizing all of its potentials. The latest stock price disturbance, may contribute to short-term losses for the investors.

IFS Capital Public

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days IFS Capital Public has generated negative risk-adjusted returns adding no value to investors with long positions. Despite quite persistent basic indicators, IFS Capital is not utilizing all of its potentials. The latest stock price mess, may contribute to short-term losses for the institutional investors.

Pair Trading with Lalin Property and IFS Capital

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

The idea behind Lalin Property Public and IFS Capital Public 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 Fundamental Analysis module to view fundamental data based on most recent published financial statements.