Correlation Between Boliden AB and Snow Lake
Can any of the company-specific risk be diversified away by investing in both Boliden AB and Snow Lake 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 Boliden AB and Snow Lake into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Boliden AB ADR and Snow Lake Resources, you can compare the effects of market volatilities on Boliden AB and Snow Lake 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 Boliden AB with a short position of Snow Lake. Check out your portfolio center. Please also check ongoing floating volatility patterns of Boliden AB and Snow Lake.
Diversification Opportunities for Boliden AB and Snow Lake
0.0 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between Boliden and Snow is 0.0. Overlapping area represents the amount of risk that can be diversified away by holding Boliden AB ADR and Snow Lake Resources in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Snow Lake Resources and Boliden AB 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 Boliden AB ADR are associated (or correlated) with Snow Lake. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Snow Lake Resources has no effect on the direction of Boliden AB i.e., Boliden AB and Snow Lake go up and down completely randomly.
Pair Corralation between Boliden AB and Snow Lake
Assuming the 90 days horizon Boliden AB ADR is expected to under-perform the Snow Lake. But the pink sheet apears to be less risky and, when comparing its historical volatility, Boliden AB ADR is 7.75 times less risky than Snow Lake. The pink sheet trades about -0.01 of its potential returns per unit of risk. The Snow Lake Resources is currently generating about 0.03 of returns per unit of risk over similar time horizon. If you would invest 212.00 in Snow Lake Resources on November 2, 2024 and sell it today you would lose (138.00) from holding Snow Lake Resources or give up 65.09% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Flat |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Boliden AB ADR vs. Snow Lake Resources
Performance |
| Timeline |
| Boliden AB ADR |
| Snow Lake Resources |
Boliden AB and Snow Lake Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Boliden AB and Snow Lake
The main advantage of trading using opposite Boliden AB and Snow Lake positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Boliden AB position performs unexpectedly, Snow Lake 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 Snow Lake will offset losses from the drop in Snow Lake's long position.| Boliden AB vs. Sumitomo Metal Mining | Boliden AB vs. Anglo American PLC | Boliden AB vs. Glencore PLC | Boliden AB vs. Snow Lake Resources |
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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 Money Managers module to screen money managers from public funds and ETFs managed around the world.
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