Correlation Between Faraday Copper and Lomiko Metals
Can any of the company-specific risk be diversified away by investing in both Faraday Copper and Lomiko Metals 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 Faraday Copper and Lomiko Metals into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Faraday Copper Corp and Lomiko Metals, you can compare the effects of market volatilities on Faraday Copper and Lomiko Metals 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 Faraday Copper with a short position of Lomiko Metals. Check out your portfolio center. Please also check ongoing floating volatility patterns of Faraday Copper and Lomiko Metals.
Diversification Opportunities for Faraday Copper and Lomiko Metals
-0.8 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between Faraday and Lomiko is -0.8. Overlapping area represents the amount of risk that can be diversified away by holding Faraday Copper Corp and Lomiko Metals in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Lomiko Metals and Faraday Copper 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 Faraday Copper Corp are associated (or correlated) with Lomiko Metals. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Lomiko Metals has no effect on the direction of Faraday Copper i.e., Faraday Copper and Lomiko Metals go up and down completely randomly.
Pair Corralation between Faraday Copper and Lomiko Metals
Assuming the 90 days trading horizon Faraday Copper Corp is expected to generate 0.4 times more return on investment than Lomiko Metals. However, Faraday Copper Corp is 2.53 times less risky than Lomiko Metals. It trades about 0.01 of its potential returns per unit of risk. Lomiko Metals is currently generating about -0.12 per unit of risk. If you would invest 83.00 in Faraday Copper Corp on September 1, 2024 and sell it today you would earn a total of 0.00 from holding Faraday Copper Corp or generate 0.0% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Faraday Copper Corp vs. Lomiko Metals
Performance |
| Timeline |
| Faraday Copper Corp |
| Lomiko Metals |
Faraday Copper and Lomiko Metals Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Faraday Copper and Lomiko Metals
The main advantage of trading using opposite Faraday Copper and Lomiko Metals positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Faraday Copper position performs unexpectedly, Lomiko Metals 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 Lomiko Metals will offset losses from the drop in Lomiko Metals' long position.| Faraday Copper vs. Arizona Sonoran Copper | Faraday Copper vs. Filo Mining Corp | Faraday Copper vs. Marimaca Copper Corp |
| Lomiko Metals vs. Sangoma Technologies Corp | Lomiko Metals vs. AGF Management Limited | Lomiko Metals vs. Metalero Mining Corp | Lomiko Metals vs. Altair Resources |
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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