Correlation Between Lake Resources and Euro Manganese
Can any of the company-specific risk be diversified away by investing in both Lake Resources and Euro Manganese 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 Euro Manganese 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 Euro Manganese, you can compare the effects of market volatilities on Lake Resources and Euro Manganese 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 Euro Manganese. Check out your portfolio center. Please also check ongoing floating volatility patterns of Lake Resources and Euro Manganese.
Diversification Opportunities for Lake Resources and Euro Manganese
0.0 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between Lake and Euro is 0.0. Overlapping area represents the amount of risk that can be diversified away by holding Lake Resources NL and Euro Manganese in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Euro Manganese 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 Euro Manganese. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Euro Manganese has no effect on the direction of Lake Resources i.e., Lake Resources and Euro Manganese go up and down completely randomly.
Pair Corralation between Lake Resources and Euro Manganese
Assuming the 90 days horizon Lake Resources NL is expected to under-perform the Euro Manganese. In addition to that, Lake Resources is 1.07 times more volatile than Euro Manganese. It trades about -0.04 of its total potential returns per unit of risk. Euro Manganese is currently generating about -0.02 per unit of volatility. If you would invest 30.00 in Euro Manganese on September 3, 2024 and sell it today you would lose (26.90) from holding Euro Manganese or give up 89.67% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Flat |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Lake Resources NL vs. Euro Manganese
Performance |
| Timeline |
| Lake Resources NL |
| Euro Manganese |
Lake Resources and Euro Manganese Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Lake Resources and Euro Manganese
The main advantage of trading using opposite Lake Resources and Euro Manganese positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Lake Resources position performs unexpectedly, Euro Manganese 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 Euro Manganese will offset losses from the drop in Euro Manganese's long position.| Lake Resources vs. Sphere Entertainment Co | Lake Resources vs. IPG Photonics | Lake Resources vs. Summit Materials | Lake Resources vs. Pinterest |
| Euro Manganese vs. Bravada Gold | Euro Manganese vs. Silver Spruce Resources | Euro Manganese vs. Monitor Ventures | Euro Manganese vs. Pershing Resources |
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 Sectors module to list of equity sectors categorizing publicly traded companies based on their primary business activities.
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