Correlation Between Lake Resources and Jourdan Resources
Can any of the company-specific risk be diversified away by investing in both Lake Resources and Jourdan Resources 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 Jourdan Resources 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 Jourdan Resources, you can compare the effects of market volatilities on Lake Resources and Jourdan Resources 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 Jourdan Resources. Check out your portfolio center. Please also check ongoing floating volatility patterns of Lake Resources and Jourdan Resources.
Diversification Opportunities for Lake Resources and Jourdan Resources
0.57 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Lake and Jourdan is 0.57. Overlapping area represents the amount of risk that can be diversified away by holding Lake Resources NL and Jourdan Resources in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Jourdan Resources 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 Jourdan Resources. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Jourdan Resources has no effect on the direction of Lake Resources i.e., Lake Resources and Jourdan Resources go up and down completely randomly.
Pair Corralation between Lake Resources and Jourdan Resources
Assuming the 90 days horizon Lake Resources NL is expected to generate 0.32 times more return on investment than Jourdan Resources. However, Lake Resources NL is 3.16 times less risky than Jourdan Resources. It trades about 0.13 of its potential returns per unit of risk. Jourdan Resources is currently generating about -0.02 per unit of risk. If you would invest 2.60 in Lake Resources NL on October 23, 2024 and sell it today you would earn a total of 0.24 from holding Lake Resources NL or generate 9.23% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Lake Resources NL vs. Jourdan Resources
Performance |
| Timeline |
| Lake Resources NL |
| Jourdan Resources |
Lake Resources and Jourdan Resources Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Lake Resources and Jourdan Resources
The main advantage of trading using opposite Lake Resources and Jourdan Resources positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Lake Resources position performs unexpectedly, Jourdan Resources 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 Jourdan Resources will offset losses from the drop in Jourdan Resources' long position.| Lake Resources vs. International Consolidated Airlines | Lake Resources vs. Texas Roadhouse | Lake Resources vs. BJs Restaurants | Lake Resources vs. Copa Holdings SA |
| Jourdan Resources vs. Bravada Gold | Jourdan Resources vs. Golden Goliath Resources | Jourdan Resources vs. Silver Spruce Resources | Jourdan Resources vs. Lake Resources NL |
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 Stock Screener module to find equities using a custom stock filter or screen asymmetry in trading patterns, price, volume, or investment outlook..
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