Correlation Between Altura Mining and Lynas Rare
Can any of the company-specific risk be diversified away by investing in both Altura Mining and Lynas Rare 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 Altura Mining and Lynas Rare into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Altura Mining Limited and Lynas Rare Earths, you can compare the effects of market volatilities on Altura Mining and Lynas Rare 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 Altura Mining with a short position of Lynas Rare. Check out your portfolio center. Please also check ongoing floating volatility patterns of Altura Mining and Lynas Rare.
Diversification Opportunities for Altura Mining and Lynas Rare
0.19 | Correlation Coefficient |
Average diversification
The 3 months correlation between Altura and Lynas is 0.19. Overlapping area represents the amount of risk that can be diversified away by holding Altura Mining Limited and Lynas Rare Earths in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Lynas Rare Earths and Altura Mining 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 Altura Mining Limited are associated (or correlated) with Lynas Rare. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Lynas Rare Earths has no effect on the direction of Altura Mining i.e., Altura Mining and Lynas Rare go up and down completely randomly.
Pair Corralation between Altura Mining and Lynas Rare
Assuming the 90 days horizon Altura Mining Limited is expected to generate 52.67 times more return on investment than Lynas Rare. However, Altura Mining is 52.67 times more volatile than Lynas Rare Earths. It trades about 0.12 of its potential returns per unit of risk. Lynas Rare Earths is currently generating about 0.01 per unit of risk. If you would invest 0.20 in Altura Mining Limited on September 3, 2024 and sell it today you would earn a total of 0.33 from holding Altura Mining Limited or generate 165.0% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Altura Mining Limited vs. Lynas Rare Earths
Performance |
| Timeline |
| Altura Mining Limited |
| Lynas Rare Earths |
Altura Mining and Lynas Rare Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Altura Mining and Lynas Rare
The main advantage of trading using opposite Altura Mining and Lynas Rare positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Altura Mining position performs unexpectedly, Lynas Rare 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 Lynas Rare will offset losses from the drop in Lynas Rare's long position.| Altura Mining vs. Qubec Nickel Corp | Altura Mining vs. IGO Limited | Altura Mining vs. Avarone Metals | Altura Mining vs. Adriatic Metals PLC |
| Lynas Rare vs. Aclara Resources | Lynas Rare vs. Anson Resources Limited | Lynas Rare vs. CDN Maverick Capital | Lynas Rare vs. Boliden AB ADR |
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 Pair Correlation module to compare performance and examine fundamental relationship between any two equity instruments.
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