Correlation Between SPASX Dividend and Lake Resources
Can any of the company-specific risk be diversified away by investing in both SPASX Dividend and Lake Resources 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 SPASX Dividend and Lake Resources into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between SPASX Dividend Opportunities and Lake Resources NL, you can compare the effects of market volatilities on SPASX Dividend and Lake Resources 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 SPASX Dividend with a short position of Lake Resources. Check out your portfolio center. Please also check ongoing floating volatility patterns of SPASX Dividend and Lake Resources.
Diversification Opportunities for SPASX Dividend and Lake Resources
0.22 | Correlation Coefficient |
Modest diversification
The 3 months correlation between SPASX and Lake is 0.22. Overlapping area represents the amount of risk that can be diversified away by holding SPASX Dividend Opportunities and Lake Resources NL in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Lake Resources NL and SPASX Dividend 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 SPASX Dividend Opportunities are associated (or correlated) with Lake Resources. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Lake Resources NL has no effect on the direction of SPASX Dividend i.e., SPASX Dividend and Lake Resources go up and down completely randomly.
Pair Corralation between SPASX Dividend and Lake Resources
Assuming the 90 days trading horizon SPASX Dividend Opportunities is expected to generate 0.26 times more return on investment than Lake Resources. However, SPASX Dividend Opportunities is 3.89 times less risky than Lake Resources. It trades about 0.16 of its potential returns per unit of risk. Lake Resources NL is currently generating about -0.59 per unit of risk. If you would invest 165,930 in SPASX Dividend Opportunities on August 31, 2024 and sell it today you would earn a total of 3,710 from holding SPASX Dividend Opportunities or generate 2.24% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 95.65% |
| Values | Daily Returns |
SPASX Dividend Opportunities vs. Lake Resources NL
Performance |
| Timeline |
SPASX Dividend and Lake Resources Volatility Contrast
Predicted Return Density |
| Returns |
SPASX Dividend Opportunities
Pair trading matchups for SPASX Dividend
Lake Resources NL
Pair trading matchups for Lake Resources
Pair Trading with SPASX Dividend and Lake Resources
The main advantage of trading using opposite SPASX Dividend and Lake Resources positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if SPASX Dividend position performs unexpectedly, Lake Resources 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 Lake Resources will offset losses from the drop in Lake Resources' long position.| SPASX Dividend vs. Centaurus Metals | SPASX Dividend vs. Readytech Holdings | SPASX Dividend vs. Aurelia Metals | SPASX Dividend vs. Leeuwin Metals |
| Lake Resources vs. Northern Star Resources | Lake Resources vs. Evolution Mining | Lake Resources vs. Bluescope Steel | Lake Resources vs. De Grey Mining |
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 Valuation module to check real value of public entities based on technical and fundamental data.
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