Correlation Between LODESTAR MIN and STRAX AB
Can any of the company-specific risk be diversified away by investing in both LODESTAR MIN and STRAX AB 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 LODESTAR MIN and STRAX AB into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between LODESTAR MIN and STRAX AB SK, you can compare the effects of market volatilities on LODESTAR MIN and STRAX AB 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 LODESTAR MIN with a short position of STRAX AB. Check out your portfolio center. Please also check ongoing floating volatility patterns of LODESTAR MIN and STRAX AB.
Diversification Opportunities for LODESTAR MIN and STRAX AB
-0.76 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between LODESTAR and STRAX is -0.76. Overlapping area represents the amount of risk that can be diversified away by holding LODESTAR MIN and STRAX AB SK in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on STRAX AB SK and LODESTAR MIN 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 LODESTAR MIN are associated (or correlated) with STRAX AB. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of STRAX AB SK has no effect on the direction of LODESTAR MIN i.e., LODESTAR MIN and STRAX AB go up and down completely randomly.
Pair Corralation between LODESTAR MIN and STRAX AB
Assuming the 90 days trading horizon LODESTAR MIN is expected to generate 9.25 times more return on investment than STRAX AB. However, LODESTAR MIN is 9.25 times more volatile than STRAX AB SK. It trades about 0.1 of its potential returns per unit of risk. STRAX AB SK is currently generating about -0.04 per unit of risk. If you would invest 0.44 in LODESTAR MIN on November 2, 2024 and sell it today you would earn a total of 8.33 from holding LODESTAR MIN or generate 1893.18% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 99.04% |
| Values | Daily Returns |
LODESTAR MIN vs. STRAX AB SK
Performance |
| Timeline |
| LODESTAR MIN |
| STRAX AB SK |
LODESTAR MIN and STRAX AB Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with LODESTAR MIN and STRAX AB
The main advantage of trading using opposite LODESTAR MIN and STRAX AB positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if LODESTAR MIN position performs unexpectedly, STRAX AB 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 STRAX AB will offset losses from the drop in STRAX AB's long position.| LODESTAR MIN vs. Apple Inc | LODESTAR MIN vs. Apple Inc | LODESTAR MIN vs. Apple Inc | LODESTAR MIN vs. Apple Inc |
| STRAX AB vs. ANGANG STEEL H | STRAX AB vs. COSMOSTEEL HLDGS | STRAX AB vs. Nippon Steel | STRAX AB vs. Insteel Industries |
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.
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