Correlation Between Lepanto Consolidated and Nickel Asia
Can any of the company-specific risk be diversified away by investing in both Lepanto Consolidated and Nickel Asia 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 Lepanto Consolidated and Nickel Asia into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Lepanto Consolidated Mining and Nickel Asia Corp, you can compare the effects of market volatilities on Lepanto Consolidated and Nickel Asia 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 Lepanto Consolidated with a short position of Nickel Asia. Check out your portfolio center. Please also check ongoing floating volatility patterns of Lepanto Consolidated and Nickel Asia.
Diversification Opportunities for Lepanto Consolidated and Nickel Asia
-0.21 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Lepanto and Nickel is -0.21. Overlapping area represents the amount of risk that can be diversified away by holding Lepanto Consolidated Mining and Nickel Asia Corp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Nickel Asia Corp and Lepanto Consolidated 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 Lepanto Consolidated Mining are associated (or correlated) with Nickel Asia. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Nickel Asia Corp has no effect on the direction of Lepanto Consolidated i.e., Lepanto Consolidated and Nickel Asia go up and down completely randomly.
Pair Corralation between Lepanto Consolidated and Nickel Asia
Assuming the 90 days trading horizon Lepanto Consolidated Mining is expected to under-perform the Nickel Asia. In addition to that, Lepanto Consolidated is 1.83 times more volatile than Nickel Asia Corp. It trades about -0.38 of its total potential returns per unit of risk. Nickel Asia Corp is currently generating about -0.26 per unit of volatility. If you would invest 345.00 in Nickel Asia Corp on August 28, 2024 and sell it today you would lose (31.00) from holding Nickel Asia Corp or give up 8.99% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 90.0% |
| Values | Daily Returns |
Lepanto Consolidated Mining vs. Nickel Asia Corp
Performance |
| Timeline |
| Lepanto Consolidated |
| Nickel Asia Corp |
Lepanto Consolidated and Nickel Asia Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Lepanto Consolidated and Nickel Asia
The main advantage of trading using opposite Lepanto Consolidated and Nickel Asia positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Lepanto Consolidated position performs unexpectedly, Nickel Asia 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 Nickel Asia will offset losses from the drop in Nickel Asia's long position.| Lepanto Consolidated vs. Semirara Mining Corp | Lepanto Consolidated vs. Robinsons Retail Holdings | Lepanto Consolidated vs. Security Bank Corp | Lepanto Consolidated vs. Lepanto Consolidated Mining |
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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 Portfolio Anywhere module to track or share privately all of your investments from the convenience of any device.
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