Correlation Between LFM Properties and Integrated Micro

Can any of the company-specific risk be diversified away by investing in both LFM Properties and Integrated Micro 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 Integrated Micro 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 Integrated Micro Electronics, you can compare the effects of market volatilities on LFM Properties and Integrated Micro 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 Integrated Micro. Check out your portfolio center. Please also check ongoing floating volatility patterns of LFM Properties and Integrated Micro.

Diversification Opportunities for LFM Properties and Integrated Micro

0.4

Correlation Coefficient

LFM Properties  Integrated Micro

Very weak diversification

The 3 months correlation between LFM and Integrated is 0.4. Overlapping area represents the amount of risk that can be diversified away by holding LFM Properties Corp and Integrated Micro Electronics in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Integrated Micro Ele 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 Integrated Micro. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Integrated Micro Ele has no effect on the direction of LFM Properties i.e., LFM Properties and Integrated Micro go up and down completely randomly.

Pair Corralation between LFM Properties and Integrated Micro

Assuming the 90 days trading horizon LFM Properties Corp is expected to generate 3.31 times more return on investment than Integrated Micro. However, LFM Properties is 3.31 times more volatile than Integrated Micro Electronics. It trades about 0.0 of its potential returns per unit of risk. Integrated Micro Electronics is currently generating about -0.07 per unit of risk. If you would invest  15.00  in LFM Properties Corp on September 13, 2024 and sell it today you would lose (9.60) from holding LFM Properties Corp or give up 64.0% of portfolio value over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Weak
Accuracy	60.46%
Values	Daily Returns

LFM Properties Corp  vs.  Integrated Micro Electronics

LFM Properties Corp

Risk-Adjusted Performance

2 of 100

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in LFM Properties Corp are ranked lower than 2 (%) of all global equities and portfolios over the last 90 days. 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.

Integrated Micro Ele

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Integrated Micro Electronics has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of latest unsteady performance, the Stock's technical and fundamental indicators remain sound and the latest tumult on Wall Street may also be a sign of longer-term gains for the firm shareholders.

Pair Trading with LFM Properties and Integrated Micro

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

The idea behind LFM Properties Corp and Integrated Micro Electronics 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 Insider Screener module to find insiders across different sectors to evaluate their impact on performance.