Correlation Between Lepanto Consolidated and Puregold Price

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

Diversification Opportunities for Lepanto Consolidated and Puregold Price

0.67

Correlation Coefficient

Lepanto Consolidated  Puregold Price

Poor diversification

The 3 months correlation between Lepanto and Puregold is 0.67. Overlapping area represents the amount of risk that can be diversified away by holding Lepanto Consolidated Mining and Puregold Price Club in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Puregold Price Club 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 Puregold Price. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Puregold Price Club has no effect on the direction of Lepanto Consolidated i.e., Lepanto Consolidated and Puregold Price go up and down completely randomly.

Pair Corralation between Lepanto Consolidated and Puregold Price

Assuming the 90 days trading horizon Lepanto Consolidated Mining is expected to under-perform the Puregold Price. In addition to that, Lepanto Consolidated is 2.14 times more volatile than Puregold Price Club. It trades about -0.01 of its total potential returns per unit of risk. Puregold Price Club is currently generating about 0.01 per unit of volatility. If you would invest  3,067  in Puregold Price Club on September 14, 2024 and sell it today you would lose (17.00) from holding Puregold Price Club or give up 0.55% of portfolio value over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Significant
Accuracy	96.47%
Values	Daily Returns

Lepanto Consolidated Mining  vs.  Puregold Price Club

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 uncertain basic indicators, Lepanto Consolidated exhibited solid returns over the last few months and may actually be approaching a breakup point.

Puregold Price Club

Risk-Adjusted Performance

3 of 100

Insignificant

Compared to the overall equity markets, risk-adjusted returns on investments in Puregold Price Club are ranked lower than 3 (%) of all global equities and portfolios over the last 90 days. Even with relatively invariable basic indicators, Puregold Price 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 Puregold Price

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

The idea behind Lepanto Consolidated Mining and Puregold Price Club 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.

Check out your portfolio center.

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 Equity Analysis module to research over 250,000 global equities including funds, stocks and ETFs to find investment opportunities.