Correlation Between Lomiko Metals and Nexa Resources
Can any of the company-specific risk be diversified away by investing in both Lomiko Metals and Nexa 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 Nexa 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 Nexa Resources SA, you can compare the effects of market volatilities on Lomiko Metals and Nexa 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 Nexa Resources. Check out your portfolio center. Please also check ongoing floating volatility patterns of Lomiko Metals and Nexa Resources.
Diversification Opportunities for Lomiko Metals and Nexa Resources
-0.85 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between Lomiko and Nexa is -0.85. Overlapping area represents the amount of risk that can be diversified away by holding Lomiko Metals and Nexa Resources SA in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Nexa Resources SA 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 Nexa Resources. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Nexa Resources SA has no effect on the direction of Lomiko Metals i.e., Lomiko Metals and Nexa Resources go up and down completely randomly.
Pair Corralation between Lomiko Metals and Nexa Resources
Assuming the 90 days horizon Lomiko Metals is expected to generate 83.79 times more return on investment than Nexa Resources. However, Lomiko Metals is 83.79 times more volatile than Nexa Resources SA. It trades about 0.18 of its potential returns per unit of risk. Nexa Resources SA is currently generating about 0.06 per unit of risk. If you would invest 19.00 in Lomiko Metals on August 31, 2024 and sell it today you would lose (10.00) from holding Lomiko Metals or give up 52.63% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Significant |
| Accuracy | 99.73% |
| Values | Daily Returns |
Lomiko Metals vs. Nexa Resources SA
Performance |
| Timeline |
| Lomiko Metals |
| Nexa Resources SA |
Lomiko Metals and Nexa Resources Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Lomiko Metals and Nexa Resources
The main advantage of trading using opposite Lomiko Metals and Nexa Resources positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Lomiko Metals position performs unexpectedly, Nexa 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 Nexa Resources will offset losses from the drop in Nexa 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 |
| Nexa Resources vs. Materion | Nexa Resources vs. Fury Gold Mines | Nexa Resources vs. Eskay Mining Corp | Nexa Resources vs. EMX Royalty 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 Latest Portfolios module to quick portfolio dashboard that showcases your latest portfolios.
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