Correlation Between 29Metals and Johns Lyng
Can any of the company-specific risk be diversified away by investing in both 29Metals and Johns Lyng 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 29Metals and Johns Lyng into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between 29Metals and Johns Lyng Group, you can compare the effects of market volatilities on 29Metals and Johns Lyng 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 29Metals with a short position of Johns Lyng. Check out your portfolio center. Please also check ongoing floating volatility patterns of 29Metals and Johns Lyng.
Diversification Opportunities for 29Metals and Johns Lyng
-0.16 | Correlation Coefficient |
Good diversification
The 3 months correlation between 29Metals and Johns is -0.16. Overlapping area represents the amount of risk that can be diversified away by holding 29Metals and Johns Lyng Group in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Johns Lyng Group and 29Metals 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 29Metals are associated (or correlated) with Johns Lyng. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Johns Lyng Group has no effect on the direction of 29Metals i.e., 29Metals and Johns Lyng go up and down completely randomly.
Pair Corralation between 29Metals and Johns Lyng
Assuming the 90 days trading horizon 29Metals is expected to under-perform the Johns Lyng. In addition to that, 29Metals is 3.72 times more volatile than Johns Lyng Group. It trades about -0.25 of its total potential returns per unit of risk. Johns Lyng Group is currently generating about -0.25 per unit of volatility. If you would invest 414.00 in Johns Lyng Group on September 13, 2024 and sell it today you would lose (37.00) from holding Johns Lyng Group or give up 8.94% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
29Metals vs. Johns Lyng Group
Performance |
| Timeline |
| 29Metals |
| Johns Lyng Group |
29Metals and Johns Lyng Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with 29Metals and Johns Lyng
The main advantage of trading using opposite 29Metals and Johns Lyng positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if 29Metals position performs unexpectedly, Johns Lyng 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 Johns Lyng will offset losses from the drop in Johns Lyng's long position.| 29Metals vs. Northern Star Resources | 29Metals vs. Evolution Mining | 29Metals vs. Bluescope Steel | 29Metals vs. Sandfire Resources NL |
| Johns Lyng vs. Patriot Battery Metals | Johns Lyng vs. Group 6 Metals | Johns Lyng vs. Ainsworth Game Technology | Johns Lyng vs. Capitol Health |
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 Fundamentals Comparison module to compare fundamentals across multiple equities to find investing opportunities.
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