Correlation Between Lomiko Metals and Western Copper
Can any of the company-specific risk be diversified away by investing in both Lomiko Metals and Western Copper 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 Western Copper into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Lomiko Metals and Western Copper and, you can compare the effects of market volatilities on Lomiko Metals and Western Copper 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 Western Copper. Check out your portfolio center. Please also check ongoing floating volatility patterns of Lomiko Metals and Western Copper.
Diversification Opportunities for Lomiko Metals and Western Copper
-0.16 | Correlation Coefficient |
Good diversification
The 3 months correlation between Lomiko and Western is -0.16. Overlapping area represents the amount of risk that can be diversified away by holding Lomiko Metals and Western Copper and in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Western Copper 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 Western Copper. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Western Copper has no effect on the direction of Lomiko Metals i.e., Lomiko Metals and Western Copper go up and down completely randomly.
Pair Corralation between Lomiko Metals and Western Copper
Assuming the 90 days horizon Lomiko Metals is expected to generate 56.73 times more return on investment than Western Copper. However, Lomiko Metals is 56.73 times more volatile than Western Copper and. It trades about 0.18 of its potential returns per unit of risk. Western Copper and is currently generating about -0.02 per unit of risk. If you would invest 20.00 in Lomiko Metals on September 3, 2024 and sell it today you would lose (10.80) from holding Lomiko Metals or give up 54.0% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Lomiko Metals vs. Western Copper and
Performance |
| Timeline |
| Lomiko Metals |
| Western Copper |
Lomiko Metals and Western Copper Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Lomiko Metals and Western Copper
The main advantage of trading using opposite Lomiko Metals and Western Copper positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Lomiko Metals position performs unexpectedly, Western Copper 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 Western Copper will offset losses from the drop in Western Copper's long position.| Lomiko Metals vs. ZincX Resources Corp | Lomiko Metals vs. Mundoro Capital | Lomiko Metals vs. Strategic Resources | Lomiko Metals vs. Norra Metals Corp |
| Western Copper vs. Fury Gold Mines | Western Copper vs. EMX Royalty Corp | Western Copper vs. Nevada King Gold | Western Copper vs. Aftermath Silver |
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 Money Flow Index module to determine momentum by analyzing Money Flow Index and other technical indicators.
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