Correlation Between Aclara Resources and Lynas Rare
Can any of the company-specific risk be diversified away by investing in both Aclara Resources 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 Aclara Resources and Lynas Rare into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Aclara Resources and Lynas Rare Earths, you can compare the effects of market volatilities on Aclara Resources 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 Aclara Resources with a short position of Lynas Rare. Check out your portfolio center. Please also check ongoing floating volatility patterns of Aclara Resources and Lynas Rare.
Diversification Opportunities for Aclara Resources and Lynas Rare
-0.17 | Correlation Coefficient |
Good diversification
The 3 months correlation between Aclara and Lynas is -0.17. Overlapping area represents the amount of risk that can be diversified away by holding Aclara Resources 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 Aclara Resources 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 Aclara Resources 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 Aclara Resources i.e., Aclara Resources and Lynas Rare go up and down completely randomly.
Pair Corralation between Aclara Resources and Lynas Rare
Assuming the 90 days horizon Aclara Resources is expected to generate 2.02 times more return on investment than Lynas Rare. However, Aclara Resources is 2.02 times more volatile than Lynas Rare Earths. It trades about 0.02 of its potential returns per unit of risk. Lynas Rare Earths is currently generating about 0.02 per unit of risk. If you would invest 33.00 in Aclara Resources on August 26, 2024 and sell it today you would lose (3.00) from holding Aclara Resources or give up 9.09% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Aclara Resources vs. Lynas Rare Earths
Performance |
| Timeline |
| Aclara Resources |
| Lynas Rare Earths |
Aclara Resources and Lynas Rare Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Aclara Resources and Lynas Rare
The main advantage of trading using opposite Aclara Resources and Lynas Rare positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Aclara Resources 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.| Aclara Resources vs. Norra Metals Corp | Aclara Resources vs. ZincX Resources Corp | Aclara Resources vs. Nuinsco Resources Limited | Aclara Resources vs. South Star Battery |
| 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 Portfolio Optimization module to compute new portfolio that will generate highest expected return given your specified tolerance for risk.
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