Correlation Between Jubilee Metals and Lake Resources
Can any of the company-specific risk be diversified away by investing in both Jubilee Metals 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 Jubilee Metals and Lake Resources into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Jubilee Metals Group and Lake Resources NL, you can compare the effects of market volatilities on Jubilee Metals 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 Jubilee Metals with a short position of Lake Resources. Check out your portfolio center. Please also check ongoing floating volatility patterns of Jubilee Metals and Lake Resources.
Diversification Opportunities for Jubilee Metals and Lake Resources
-0.49 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Jubilee and Lake is -0.49. Overlapping area represents the amount of risk that can be diversified away by holding Jubilee Metals Group 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 Jubilee Metals 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 Jubilee Metals Group 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 Jubilee Metals i.e., Jubilee Metals and Lake Resources go up and down completely randomly.
Pair Corralation between Jubilee Metals and Lake Resources
Assuming the 90 days horizon Jubilee Metals Group is expected to under-perform the Lake Resources. In addition to that, Jubilee Metals is 1.13 times more volatile than Lake Resources NL. It trades about -0.14 of its total potential returns per unit of risk. Lake Resources NL is currently generating about -0.16 per unit of volatility. If you would invest 3.40 in Lake Resources NL on September 13, 2024 and sell it today you would lose (0.90) from holding Lake Resources NL or give up 26.47% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Jubilee Metals Group vs. Lake Resources NL
Performance |
| Timeline |
| Jubilee Metals Group |
| Lake Resources NL |
Jubilee Metals and Lake Resources Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Jubilee Metals and Lake Resources
The main advantage of trading using opposite Jubilee Metals and Lake Resources positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Jubilee Metals 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.The idea behind Jubilee Metals Group and Lake Resources NL pairs trading is to make the combined position market-neutral, meaning the overall market's direction will not affect its win or loss (or potential downside or upside). This can be achieved by designing a pairs trade with two highly correlated stocks or equities that operate in a similar space or sector, making it possible to obtain profits through simple and relatively low-risk investment.| Lake Resources vs. Entegris | Lake Resources vs. EMCOR Group | Lake Resources vs. RBC Bearings Incorporated | Lake Resources vs. MagnaChip Semiconductor |
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.
Other Complementary Tools
| Cryptocurrency Center Build and monitor diversified portfolio of extremely risky digital assets and cryptocurrency | |
| Portfolio Volatility Check portfolio volatility and analyze historical return density to properly model market risk | |
| Earnings Calls Check upcoming earnings announcements updated hourly across public exchanges | |
| Price Exposure Probability Analyze equity upside and downside potential for a given time horizon across multiple markets | |
| Equity Search Search for actively traded equities including funds and ETFs from over 30 global markets |