Correlation Between Liontown Resources and AEON METALS
Can any of the company-specific risk be diversified away by investing in both Liontown Resources and AEON 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 Liontown Resources and AEON METALS into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Liontown Resources Limited and AEON METALS LTD, you can compare the effects of market volatilities on Liontown Resources and AEON 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 Liontown Resources with a short position of AEON METALS. Check out your portfolio center. Please also check ongoing floating volatility patterns of Liontown Resources and AEON METALS.
Diversification Opportunities for Liontown Resources and AEON METALS
0.0 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between Liontown and AEON is 0.0. Overlapping area represents the amount of risk that can be diversified away by holding Liontown Resources Limited and AEON METALS LTD in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on AEON METALS LTD and Liontown Resources 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 Liontown Resources Limited are associated (or correlated) with AEON METALS. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of AEON METALS LTD has no effect on the direction of Liontown Resources i.e., Liontown Resources and AEON METALS go up and down completely randomly.
Pair Corralation between Liontown Resources and AEON METALS
If you would invest 59.00 in Liontown Resources Limited on November 3, 2024 and sell it today you would lose (21.00) from holding Liontown Resources Limited or give up 35.59% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Flat |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Liontown Resources Limited vs. AEON METALS LTD
Performance |
| Timeline |
| Liontown Resources |
| AEON METALS LTD |
Liontown Resources and AEON METALS Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Liontown Resources and AEON METALS
The main advantage of trading using opposite Liontown Resources and AEON METALS positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Liontown Resources position performs unexpectedly, AEON 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 AEON METALS will offset losses from the drop in AEON METALS's long position.| Liontown Resources vs. Axfood AB | Liontown Resources vs. DALATA HOTEL | Liontown Resources vs. Choice Hotels International | Liontown Resources vs. CAL MAINE FOODS |
| AEON METALS vs. Rio Tinto Group | AEON METALS vs. Anglo American plc | AEON METALS vs. Mineral Resources Limited | AEON METALS vs. Liontown Resources Limited |
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 Commodity Directory module to find actively traded commodities issued by global exchanges.
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