Correlation Between Lomiko Metals and Iluka Resources
Can any of the company-specific risk be diversified away by investing in both Lomiko Metals and Iluka 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 Lomiko Metals and Iluka Resources into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Lomiko Metals and Iluka Resources Ltd, you can compare the effects of market volatilities on Lomiko Metals and Iluka 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 Lomiko Metals with a short position of Iluka Resources. Check out your portfolio center. Please also check ongoing floating volatility patterns of Lomiko Metals and Iluka Resources.
Diversification Opportunities for Lomiko Metals and Iluka Resources
0.59 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Lomiko and Iluka is 0.59. Overlapping area represents the amount of risk that can be diversified away by holding Lomiko Metals and Iluka Resources Ltd in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Iluka Resources 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 Iluka Resources. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Iluka Resources has no effect on the direction of Lomiko Metals i.e., Lomiko Metals and Iluka Resources go up and down completely randomly.
Pair Corralation between Lomiko Metals and Iluka Resources
Assuming the 90 days horizon Lomiko Metals is expected to under-perform the Iluka Resources. In addition to that, Lomiko Metals is 3.98 times more volatile than Iluka Resources Ltd. It trades about -0.22 of its total potential returns per unit of risk. Iluka Resources Ltd is currently generating about 0.02 per unit of volatility. If you would invest 1,636 in Iluka Resources Ltd on October 13, 2024 and sell it today you would earn a total of 4.00 from holding Iluka Resources Ltd or generate 0.24% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 95.0% |
| Values | Daily Returns |
Lomiko Metals vs. Iluka Resources Ltd
Performance |
| Timeline |
| Lomiko Metals |
| Iluka Resources |
Lomiko Metals and Iluka Resources Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Lomiko Metals and Iluka Resources
The main advantage of trading using opposite Lomiko Metals and Iluka Resources positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Lomiko Metals position performs unexpectedly, Iluka 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 Iluka Resources will offset losses from the drop in Iluka Resources' long position.| Lomiko Metals vs. ZincX Resources Corp | Lomiko Metals vs. Mundoro Capital | Lomiko Metals vs. Strategic Resources | Lomiko Metals vs. Norra Metals Corp |
| Iluka Resources vs. ERAMET SA | Iluka Resources vs. Giyani Metals Corp | Iluka Resources vs. IGO Limited | Iluka Resources vs. Grid 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 USA ETFs module to find actively traded Exchange Traded Funds (ETF) in USA.
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