Correlation Between Lake Resources and Bullion Gold
Can any of the company-specific risk be diversified away by investing in both Lake Resources and Bullion Gold 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 Bullion Gold 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 Bullion Gold Resources, you can compare the effects of market volatilities on Lake Resources and Bullion Gold 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 Bullion Gold. Check out your portfolio center. Please also check ongoing floating volatility patterns of Lake Resources and Bullion Gold.
Diversification Opportunities for Lake Resources and Bullion Gold
0.42 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Lake and Bullion is 0.42. Overlapping area represents the amount of risk that can be diversified away by holding Lake Resources NL and Bullion Gold Resources in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Bullion Gold 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 Bullion Gold. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Bullion Gold Resources has no effect on the direction of Lake Resources i.e., Lake Resources and Bullion Gold go up and down completely randomly.
Pair Corralation between Lake Resources and Bullion Gold
If you would invest 1.84 in Bullion Gold Resources on September 1, 2024 and sell it today you would earn a total of 0.00 from holding Bullion Gold Resources or generate 0.0% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 95.45% |
| Values | Daily Returns |
Lake Resources NL vs. Bullion Gold Resources
Performance |
| Timeline |
| Lake Resources NL |
| Bullion Gold Resources |
Lake Resources and Bullion Gold Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Lake Resources and Bullion Gold
The main advantage of trading using opposite Lake Resources and Bullion Gold positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Lake Resources position performs unexpectedly, Bullion Gold 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 Bullion Gold will offset losses from the drop in Bullion Gold's long position.| Lake Resources vs. Gentex | Lake Resources vs. American Axle Manufacturing | Lake Resources vs. Magna International | Lake Resources vs. ChampionX |
| Bullion Gold vs. Tartisan Nickel Corp | Bullion Gold vs. Euro Manganese | Bullion Gold vs. American CuMo Mining |
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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