Correlation Between LOG Commercial and LPS Brasil

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

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

Diversification Opportunities for LOG Commercial and LPS Brasil

0.68

Correlation Coefficient

LOG Commercial  LPS Brasil

Poor diversification

The 3 months correlation between LOG and LPS is 0.68. Overlapping area represents the amount of risk that can be diversified away by holding LOG Commercial Properties and LPS Brasil in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on LPS Brasil and LOG Commercial 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 LOG Commercial Properties are associated (or correlated) with LPS Brasil. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of LPS Brasil has no effect on the direction of LOG Commercial i.e., LOG Commercial and LPS Brasil go up and down completely randomly.

Pair Corralation between LOG Commercial and LPS Brasil

Assuming the 90 days trading horizon LOG Commercial is expected to generate 14.08 times less return on investment than LPS Brasil. But when comparing it to its historical volatility, LOG Commercial Properties is 2.37 times less risky than LPS Brasil. It trades about 0.01 of its potential returns per unit of risk. LPS Brasil is currently generating about 0.05 of returns per unit of risk over similar time horizon. If you would invest  132.00  in LPS Brasil on April 24, 2025 and sell it today you would earn a total of  10.00  from holding LPS Brasil or generate 7.58% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Significant
Accuracy	100.0%
Values	Daily Returns

LOG Commercial Properties  vs.  LPS Brasil

LOG Commercial Properties

Risk-Adjusted Performance

Very Weak

Over the last 90 days LOG Commercial Properties has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of comparatively stable basic indicators, LOG Commercial is not utilizing all of its potentials. The newest stock price uproar, may contribute to short-horizon losses for the private investors.

LPS Brasil

Risk-Adjusted Performance

Insignificant

Compared to the overall equity markets, risk-adjusted returns on investments in LPS Brasil are ranked lower than 3 (%) of all global equities and portfolios over the last 90 days. In spite of comparatively uncertain basic indicators, LPS Brasil may actually be approaching a critical reversion point that can send shares even higher in August 2025.

Pair Trading with LOG Commercial and LPS Brasil

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

The idea behind LOG Commercial Properties and LPS Brasil 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 Watchlist Optimization module to optimize watchlists to build efficient portfolios or rebalance existing positions based on the mean-variance optimization algorithm.