Correlation Between Lomiko Metals and Graphite One
Can any of the company-specific risk be diversified away by investing in both Lomiko Metals and Graphite One 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 Graphite One into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Lomiko Metals and Graphite One, you can compare the effects of market volatilities on Lomiko Metals and Graphite One 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 Graphite One. Check out your portfolio center. Please also check ongoing floating volatility patterns of Lomiko Metals and Graphite One.
Diversification Opportunities for Lomiko Metals and Graphite One
0.06 | Correlation Coefficient |
Significant diversification
The 3 months correlation between Lomiko and Graphite is 0.06. Overlapping area represents the amount of risk that can be diversified away by holding Lomiko Metals and Graphite One in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Graphite One 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 Graphite One. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Graphite One has no effect on the direction of Lomiko Metals i.e., Lomiko Metals and Graphite One go up and down completely randomly.
Pair Corralation between Lomiko Metals and Graphite One
Assuming the 90 days horizon Lomiko Metals is expected to generate 42.17 times more return on investment than Graphite One. However, Lomiko Metals is 42.17 times more volatile than Graphite One. It trades about 0.18 of its potential returns per unit of risk. Graphite One is currently generating about 0.0 per unit of risk. If you would invest 23.00 in Lomiko Metals on August 27, 2024 and sell it today you would lose (14.10) from holding Lomiko Metals or give up 61.3% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Lomiko Metals vs. Graphite One
Performance |
| Timeline |
| Lomiko Metals |
| Graphite One |
Lomiko Metals and Graphite One Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Lomiko Metals and Graphite One
The main advantage of trading using opposite Lomiko Metals and Graphite One positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Lomiko Metals position performs unexpectedly, Graphite One 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 Graphite One will offset losses from the drop in Graphite One's long position.The idea behind Lomiko Metals and Graphite One pairs trading is to make the combined position market-neutral, meaning the overall market's direction will not affect its win or loss (or potential downside or upside). This can be achieved by designing a pairs trade with two highly correlated stocks or equities that operate in a similar space or sector, making it possible to obtain profits through simple and relatively low-risk investment.| Graphite One vs. Ascendant Resources | Graphite One vs. Cantex Mine Development | Graphite One vs. Amarc Resources | Graphite One vs. Sterling Metals Corp |
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 Financial Widgets module to easily integrated Macroaxis content with over 30 different plug-and-play financial widgets.
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