Correlation Between Group 6 and Lake Resources
Can any of the company-specific risk be diversified away by investing in both Group 6 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 Group 6 and Lake Resources into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Group 6 Metals and Lake Resources NL, you can compare the effects of market volatilities on Group 6 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 Group 6 with a short position of Lake Resources. Check out your portfolio center. Please also check ongoing floating volatility patterns of Group 6 and Lake Resources.
Diversification Opportunities for Group 6 and Lake Resources
-0.03 | Correlation Coefficient |
Good diversification
The 3 months correlation between Group and Lake is -0.03. Overlapping area represents the amount of risk that can be diversified away by holding Group 6 Metals 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 Group 6 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 Group 6 Metals 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 Group 6 i.e., Group 6 and Lake Resources go up and down completely randomly.
Pair Corralation between Group 6 and Lake Resources
If you would invest 2.50 in Group 6 Metals on September 2, 2024 and sell it today you would earn a total of 0.00 from holding Group 6 Metals or generate 0.0% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Group 6 Metals vs. Lake Resources NL
Performance |
| Timeline |
| Group 6 Metals |
| Lake Resources NL |
Group 6 and Lake Resources Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Group 6 and Lake Resources
The main advantage of trading using opposite Group 6 and Lake Resources positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Group 6 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.| Group 6 vs. Advanced Braking Technology | Group 6 vs. Ainsworth Game Technology | Group 6 vs. Macquarie Technology Group | Group 6 vs. Ras Technology Holdings |
| Lake Resources vs. Group 6 Metals | Lake Resources vs. Charter Hall Retail | Lake Resources vs. MFF Capital Investments | Lake Resources vs. Centaurus Metals |
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 Economic Indicators module to top statistical indicators that provide insights into how an economy is performing.
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