Correlation Between Lepanto Consolidated and Filinvest REIT

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

Diversification Opportunities for Lepanto Consolidated and Filinvest REIT

0.28

Correlation Coefficient

Lepanto Consolidated  Filinvest REIT

Modest diversification

The 3 months correlation between Lepanto and Filinvest is 0.28. Overlapping area represents the amount of risk that can be diversified away by holding Lepanto Consolidated Mining and Filinvest REIT Corp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Filinvest REIT Corp 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 Filinvest REIT. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Filinvest REIT Corp has no effect on the direction of Lepanto Consolidated i.e., Lepanto Consolidated and Filinvest REIT go up and down completely randomly.

Pair Corralation between Lepanto Consolidated and Filinvest REIT

Assuming the 90 days trading horizon Lepanto Consolidated Mining is expected to generate 2.76 times more return on investment than Filinvest REIT. However, Lepanto Consolidated is 2.76 times more volatile than Filinvest REIT Corp. It trades about -0.02 of its potential returns per unit of risk. Filinvest REIT Corp is currently generating about -0.06 per unit of risk. If you would invest  12.00  in Lepanto Consolidated Mining on October 12, 2024 and sell it today you would lose (5.50) from holding Lepanto Consolidated Mining or give up 45.83% of portfolio value over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Very Weak
Accuracy	80.17%
Values	Daily Returns

Lepanto Consolidated Mining  vs.  Filinvest REIT Corp

Lepanto Consolidated

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Lepanto Consolidated Mining has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of weak performance in the last few months, the Stock's technical and fundamental indicators remain rather sound which may send shares a bit higher in February 2025. The latest tumult may also be a sign of longer-term up-swing for the firm shareholders.

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.

Pair Trading with Lepanto Consolidated and Filinvest REIT

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

The idea behind Lepanto Consolidated Mining and Filinvest REIT 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 My Watchlist Analysis module to analyze my current watchlist and to refresh optimization strategy. Macroaxis watchlist is based on self-learning algorithm to remember stocks you like.