Correlation Between Dug Technology and Lynas Rare
Can any of the company-specific risk be diversified away by investing in both Dug Technology 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 Dug Technology and Lynas Rare into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Dug Technology and Lynas Rare Earths, you can compare the effects of market volatilities on Dug Technology 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 Dug Technology with a short position of Lynas Rare. Check out your portfolio center. Please also check ongoing floating volatility patterns of Dug Technology and Lynas Rare.
Diversification Opportunities for Dug Technology and Lynas Rare
0.18 | Correlation Coefficient |
Average diversification
The 3 months correlation between Dug and Lynas is 0.18. Overlapping area represents the amount of risk that can be diversified away by holding Dug Technology 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 Dug Technology 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 Dug Technology 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 Dug Technology i.e., Dug Technology and Lynas Rare go up and down completely randomly.
Pair Corralation between Dug Technology and Lynas Rare
Assuming the 90 days trading horizon Dug Technology is expected to under-perform the Lynas Rare. In addition to that, Dug Technology is 2.36 times more volatile than Lynas Rare Earths. It trades about -0.24 of its total potential returns per unit of risk. Lynas Rare Earths is currently generating about -0.25 per unit of volatility. If you would invest 775.00 in Lynas Rare Earths on September 13, 2024 and sell it today you would lose (78.00) from holding Lynas Rare Earths or give up 10.06% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Dug Technology vs. Lynas Rare Earths
Performance |
| Timeline |
| Dug Technology |
| Lynas Rare Earths |
Dug Technology and Lynas Rare Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Dug Technology and Lynas Rare
The main advantage of trading using opposite Dug Technology and Lynas Rare positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Dug Technology 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.| Dug Technology vs. Aneka Tambang Tbk | Dug Technology vs. BHP Group Limited | Dug Technology vs. Commonwealth Bank | Dug Technology vs. Commonwealth Bank of |
| Lynas Rare vs. Ainsworth Game Technology | Lynas Rare vs. BKI Investment | Lynas Rare vs. Microequities Asset Management | Lynas Rare vs. Clime Investment Management |
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 Center module to all portfolio management and optimization tools to improve performance of your portfolios.
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