Correlation Between LFM Properties and Prime Media

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

By analyzing existing cross correlation between LFM Properties Corp and Prime Media Holdings, you can compare the effects of market volatilities on LFM Properties and Prime Media 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 LFM Properties with a short position of Prime Media. Check out your portfolio center. Please also check ongoing floating volatility patterns of LFM Properties and Prime Media.

Diversification Opportunities for LFM Properties and Prime Media

0.58

Correlation Coefficient

LFM Properties  Prime Media

Very weak diversification

The 3 months correlation between LFM and Prime is 0.58. Overlapping area represents the amount of risk that can be diversified away by holding LFM Properties Corp and Prime Media Holdings in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Prime Media Holdings and LFM Properties 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 LFM Properties Corp are associated (or correlated) with Prime Media. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Prime Media Holdings has no effect on the direction of LFM Properties i.e., LFM Properties and Prime Media go up and down completely randomly.

Pair Corralation between LFM Properties and Prime Media

Assuming the 90 days trading horizon LFM Properties Corp is expected to generate 2.04 times more return on investment than Prime Media. However, LFM Properties is 2.04 times more volatile than Prime Media Holdings. It trades about 0.07 of its potential returns per unit of risk. Prime Media Holdings is currently generating about -0.07 per unit of risk. If you would invest  4.40  in LFM Properties Corp on December 30, 2024 and sell it today you would earn a total of  0.20  from holding LFM Properties Corp or generate 4.55% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Weak
Accuracy	32.2%
Values	Daily Returns

LFM Properties Corp  vs.  Prime Media Holdings

LFM Properties Corp

Risk-Adjusted Performance

Modest

Over the last 90 days LFM Properties Corp has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of rather unsteady technical and fundamental indicators, LFM Properties exhibited solid returns over the last few months and may actually be approaching a breakup point.

Prime Media Holdings

Risk-Adjusted Performance

Very Weak

Over the last 90 days Prime Media Holdings 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 basic indicators remain comparatively stable which may send shares a bit higher in April 2025. The newest uproar may also be a sign of mid-term up-swing for the firm private investors.

Pair Trading with LFM Properties and Prime Media

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

The idea behind LFM Properties Corp and Prime Media Holdings 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 Competition Analyzer module to analyze and compare many basic indicators for a group of related or unrelated entities.