Correlation Between Lake Resources and Jubilee Metals
Can any of the company-specific risk be diversified away by investing in both Lake Resources and Jubilee 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 Lake Resources and Jubilee Metals 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 Jubilee Metals Group, you can compare the effects of market volatilities on Lake Resources and Jubilee 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 Lake Resources with a short position of Jubilee Metals. Check out your portfolio center. Please also check ongoing floating volatility patterns of Lake Resources and Jubilee Metals.
Diversification Opportunities for Lake Resources and Jubilee Metals
-0.49 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Lake and Jubilee is -0.49. Overlapping area represents the amount of risk that can be diversified away by holding Lake Resources NL and Jubilee Metals Group in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Jubilee Metals Group 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 Jubilee Metals. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Jubilee Metals Group has no effect on the direction of Lake Resources i.e., Lake Resources and Jubilee Metals go up and down completely randomly.
Pair Corralation between Lake Resources and Jubilee Metals
Assuming the 90 days horizon Lake Resources NL is expected to generate 0.88 times more return on investment than Jubilee Metals. However, Lake Resources NL is 1.13 times less risky than Jubilee Metals. It trades about -0.16 of its potential returns per unit of risk. Jubilee Metals Group is currently generating about -0.14 per unit of risk. If you would invest 3.40 in Lake Resources NL on September 13, 2024 and sell it today you would lose (0.90) from holding Lake Resources NL or give up 26.47% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Lake Resources NL vs. Jubilee Metals Group
Performance |
| Timeline |
| Lake Resources NL |
| Jubilee Metals Group |
Lake Resources and Jubilee Metals Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Lake Resources and Jubilee Metals
The main advantage of trading using opposite Lake Resources and Jubilee Metals positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Lake Resources position performs unexpectedly, Jubilee 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 Jubilee Metals will offset losses from the drop in Jubilee Metals' long position.| Lake Resources vs. Entegris | Lake Resources vs. EMCOR Group | Lake Resources vs. RBC Bearings Incorporated | Lake Resources vs. MagnaChip Semiconductor |
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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