Correlation Between Lomiko Metals and Focus Graphite
Can any of the company-specific risk be diversified away by investing in both Lomiko Metals and Focus Graphite 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 Lomiko Metals and Focus Graphite into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Lomiko Metals and Focus Graphite, you can compare the effects of market volatilities on Lomiko Metals and Focus Graphite 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 Lomiko Metals with a short position of Focus Graphite. Check out your portfolio center. Please also check ongoing floating volatility patterns of Lomiko Metals and Focus Graphite.
Diversification Opportunities for Lomiko Metals and Focus Graphite
0.95 | Correlation Coefficient |
Almost no diversification
The 3 months correlation between Lomiko and Focus is 0.95. Overlapping area represents the amount of risk that can be diversified away by holding Lomiko Metals and Focus Graphite in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Focus Graphite and Lomiko Metals 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 Lomiko Metals are associated (or correlated) with Focus Graphite. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Focus Graphite has no effect on the direction of Lomiko Metals i.e., Lomiko Metals and Focus Graphite go up and down completely randomly.
Pair Corralation between Lomiko Metals and Focus Graphite
Assuming the 90 days horizon Lomiko Metals is expected to under-perform the Focus Graphite. But the stock apears to be less risky and, when comparing its historical volatility, Lomiko Metals is 1.06 times less risky than Focus Graphite. The stock trades about -0.11 of its potential returns per unit of risk. The Focus Graphite is currently generating about -0.06 of returns per unit of risk over similar time horizon. If you would invest 9.00 in Focus Graphite on August 30, 2024 and sell it today you would lose (1.50) from holding Focus Graphite or give up 16.67% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Lomiko Metals vs. Focus Graphite
Performance |
| Timeline |
| Lomiko Metals |
| Focus Graphite |
Lomiko Metals and Focus Graphite Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Lomiko Metals and Focus Graphite
The main advantage of trading using opposite Lomiko Metals and Focus Graphite positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Lomiko Metals position performs unexpectedly, Focus Graphite 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 Focus Graphite will offset losses from the drop in Focus Graphite's long position.| Lomiko Metals vs. First Majestic Silver | Lomiko Metals vs. Ivanhoe Energy | Lomiko Metals vs. Orezone Gold Corp | Lomiko Metals vs. Faraday Copper Corp |
| Focus Graphite vs. Northern Graphite | Focus Graphite vs. Mason Graphite | Focus Graphite vs. Lomiko Metals | Focus Graphite vs. Graphite One |
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 Funds Screener module to find actively-traded funds from around the world traded on over 30 global exchanges.
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