Correlation Between Lake Resources and Altair International
Can any of the company-specific risk be diversified away by investing in both Lake Resources and Altair International 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 Lake Resources and Altair International into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Lake Resources NL and Altair International Corp, you can compare the effects of market volatilities on Lake Resources and Altair International 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 Lake Resources with a short position of Altair International. Check out your portfolio center. Please also check ongoing floating volatility patterns of Lake Resources and Altair International.
Diversification Opportunities for Lake Resources and Altair International
-0.26 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Lake and Altair is -0.26. Overlapping area represents the amount of risk that can be diversified away by holding Lake Resources NL and Altair International Corp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Altair International Corp and Lake 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 Lake Resources NL are associated (or correlated) with Altair International. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Altair International Corp has no effect on the direction of Lake Resources i.e., Lake Resources and Altair International go up and down completely randomly.
Pair Corralation between Lake Resources and Altair International
Assuming the 90 days horizon Lake Resources NL is expected to under-perform the Altair International. But the otc stock apears to be less risky and, when comparing its historical volatility, Lake Resources NL is 1.99 times less risky than Altair International. The otc stock trades about -0.32 of its potential returns per unit of risk. The Altair International Corp is currently generating about 0.02 of returns per unit of risk over similar time horizon. If you would invest 4.50 in Altair International Corp on September 1, 2024 and sell it today you would lose (0.49) from holding Altair International Corp or give up 10.89% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 95.45% |
| Values | Daily Returns |
Lake Resources NL vs. Altair International Corp
Performance |
| Timeline |
| Lake Resources NL |
| Altair International Corp |
Lake Resources and Altair International Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Lake Resources and Altair International
The main advantage of trading using opposite Lake Resources and Altair International positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Lake Resources position performs unexpectedly, Altair International 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 Altair International will offset losses from the drop in Altair International's long position.| Lake Resources vs. Gentex | Lake Resources vs. American Axle Manufacturing | Lake Resources vs. Magna International | Lake Resources vs. ChampionX |
| Altair International vs. ATT Inc | Altair International vs. Merck Company | Altair International vs. Walt Disney | Altair International vs. Caterpillar |
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 Transaction History module to view history of all your transactions and understand their impact on performance.
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