Correlation Between Lepanto Consolidated and Lepanto Consolidated

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

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

Diversification Opportunities for Lepanto Consolidated and Lepanto Consolidated

0.73

Correlation Coefficient

Lepanto Consolidated  Lepanto Consolidated

Poor diversification

The 3 months correlation between Lepanto and Lepanto is 0.73. Overlapping area represents the amount of risk that can be diversified away by holding Lepanto Consolidated Mining and Lepanto Consolidated Mining in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Lepanto Consolidated and Lepanto Consolidated 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 Lepanto Consolidated Mining 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 Lepanto Consolidated i.e., Lepanto Consolidated and Lepanto Consolidated go up and down completely randomly.

Pair Corralation between Lepanto Consolidated and Lepanto Consolidated

Assuming the 90 days trading horizon Lepanto Consolidated Mining is expected to under-perform the Lepanto Consolidated. But the stock apears to be less risky and, when comparing its historical volatility, Lepanto Consolidated Mining is 1.3 times less risky than Lepanto Consolidated. The stock trades about -0.02 of its potential returns per unit of risk. The Lepanto Consolidated Mining is currently generating about -0.01 of returns per unit of risk over similar time horizon. If you would invest  12.00  in Lepanto Consolidated Mining on September 24, 2024 and sell it today you would lose (5.20) from holding Lepanto Consolidated Mining or give up 43.33% of portfolio value over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Significant
Accuracy	82.52%
Values	Daily Returns

Lepanto Consolidated Mining  vs.  Lepanto Consolidated Mining

Lepanto Consolidated

Risk-Adjusted Performance

2 of 100

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in Lepanto Consolidated Mining are ranked lower than 2 (%) of all global equities and portfolios over the last 90 days. In spite of rather uncertain basic indicators, Lepanto Consolidated may actually be approaching a critical reversion point that can send shares even higher in January 2025.

Lepanto Consolidated

Risk-Adjusted Performance

4 of 100

Insignificant

Compared to the overall equity markets, risk-adjusted returns on investments in Lepanto Consolidated Mining are ranked lower than 4 (%) of all global equities and portfolios over the last 90 days. In spite of rather unsteady technical and fundamental indicators, Lepanto Consolidated exhibited solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Lepanto Consolidated and Lepanto Consolidated

The main advantage of trading using opposite Lepanto Consolidated and Lepanto Consolidated positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Lepanto Consolidated 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.

The idea behind Lepanto Consolidated Mining and Lepanto Consolidated Mining 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 Portfolio Analyzer module to portfolio analysis module that provides access to portfolio diagnostics and optimization engine.