Correlation Between Lowe Cos and Thor Mining
Can any of the company-specific risk be diversified away by investing in both Lowe Cos and Thor Mining 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 Lowe Cos and Thor Mining into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Lowe Cos and Thor Mining PLC, you can compare the effects of market volatilities on Lowe Cos and Thor Mining 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 Lowe Cos with a short position of Thor Mining. Check out your portfolio center. Please also check ongoing floating volatility patterns of Lowe Cos and Thor Mining.
Diversification Opportunities for Lowe Cos and Thor Mining
0.48 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Lowe and Thor is 0.48. Overlapping area represents the amount of risk that can be diversified away by holding Lowe Cos and Thor Mining PLC in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Thor Mining PLC and Lowe Cos 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 Lowe Cos are associated (or correlated) with Thor Mining. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Thor Mining PLC has no effect on the direction of Lowe Cos i.e., Lowe Cos and Thor Mining go up and down completely randomly.
Pair Corralation between Lowe Cos and Thor Mining
Assuming the 90 days trading horizon Lowe Cos is expected to generate 0.37 times more return on investment than Thor Mining. However, Lowe Cos is 2.71 times less risky than Thor Mining. It trades about 0.34 of its potential returns per unit of risk. Thor Mining PLC is currently generating about -0.21 per unit of risk. If you would invest 24,601 in Lowe Cos on October 20, 2024 and sell it today you would earn a total of 1,503 from holding Lowe Cos or generate 6.11% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Lowe Cos vs. Thor Mining PLC
Performance |
| Timeline |
| Lowe Cos |
| Thor Mining PLC |
Lowe Cos and Thor Mining Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Lowe Cos and Thor Mining
The main advantage of trading using opposite Lowe Cos and Thor Mining positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Lowe Cos position performs unexpectedly, Thor Mining 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 Thor Mining will offset losses from the drop in Thor Mining's long position.| Lowe Cos vs. CAP LEASE AVIATION | Lowe Cos vs. Clean Power Hydrogen | Lowe Cos vs. Blackstone Loan Financing | Lowe Cos vs. Supermarket Income REIT |
| Thor Mining vs. Antofagasta PLC | Thor Mining vs. Ferrexpo PLC | Thor Mining vs. Atalaya Mining | Thor Mining vs. Amaroq Minerals |
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 Portfolio Backtesting module to avoid under-diversification and over-optimization by backtesting your portfolios.
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