Correlation Between Latitude Financial and Mantle Minerals
Can any of the company-specific risk be diversified away by investing in both Latitude Financial and Mantle Minerals 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 Latitude Financial and Mantle Minerals into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Latitude Financial Services and Mantle Minerals Limited, you can compare the effects of market volatilities on Latitude Financial and Mantle Minerals 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 Latitude Financial with a short position of Mantle Minerals. Check out your portfolio center. Please also check ongoing floating volatility patterns of Latitude Financial and Mantle Minerals.
Diversification Opportunities for Latitude Financial and Mantle Minerals
0.04 | Correlation Coefficient |
Significant diversification
The 3 months correlation between Latitude and Mantle is 0.04. Overlapping area represents the amount of risk that can be diversified away by holding Latitude Financial Services and Mantle Minerals Limited in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Mantle Minerals and Latitude Financial 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 Latitude Financial Services are associated (or correlated) with Mantle Minerals. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Mantle Minerals has no effect on the direction of Latitude Financial i.e., Latitude Financial and Mantle Minerals go up and down completely randomly.
Pair Corralation between Latitude Financial and Mantle Minerals
Assuming the 90 days trading horizon Latitude Financial is expected to generate 2314.75 times less return on investment than Mantle Minerals. But when comparing it to its historical volatility, Latitude Financial Services is 48.97 times less risky than Mantle Minerals. It trades about 0.0 of its potential returns per unit of risk. Mantle Minerals Limited is currently generating about 0.06 of returns per unit of risk over similar time horizon. If you would invest 0.10 in Mantle Minerals Limited on October 23, 2024 and sell it today you would earn a total of 0.00 from holding Mantle Minerals Limited or generate 0.0% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Latitude Financial Services vs. Mantle Minerals Limited
Performance |
| Timeline |
| Latitude Financial |
| Mantle Minerals |
Latitude Financial and Mantle Minerals Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Latitude Financial and Mantle Minerals
The main advantage of trading using opposite Latitude Financial and Mantle Minerals positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Latitude Financial position performs unexpectedly, Mantle Minerals 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 Mantle Minerals will offset losses from the drop in Mantle Minerals' long position.| Latitude Financial vs. Westpac Banking | Latitude Financial vs. Ecofibre | Latitude Financial vs. Australian Dairy Farms | Latitude Financial vs. Australian Agricultural |
| Mantle Minerals vs. Cosmo Metals | Mantle Minerals vs. Oneview Healthcare PLC | Mantle Minerals vs. Healthco Healthcare and | Mantle Minerals vs. Regis Healthcare |
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 Analyst Advice module to analyst recommendations and target price estimates broken down by several categories.
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