Correlation Between Lotus Resources and BCM Resources
Can any of the company-specific risk be diversified away by investing in both Lotus Resources and BCM 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 Lotus Resources and BCM Resources into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Lotus Resources Limited and BCM Resources, you can compare the effects of market volatilities on Lotus Resources and BCM 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 Lotus Resources with a short position of BCM Resources. Check out your portfolio center. Please also check ongoing floating volatility patterns of Lotus Resources and BCM Resources.
Diversification Opportunities for Lotus Resources and BCM Resources
-0.16 | Correlation Coefficient |
Good diversification
The 3 months correlation between Lotus and BCM is -0.16. Overlapping area represents the amount of risk that can be diversified away by holding Lotus Resources Limited and BCM Resources in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on BCM Resources and Lotus Resources 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 Lotus Resources Limited are associated (or correlated) with BCM Resources. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of BCM Resources has no effect on the direction of Lotus Resources i.e., Lotus Resources and BCM Resources go up and down completely randomly.
Pair Corralation between Lotus Resources and BCM Resources
Assuming the 90 days horizon Lotus Resources Limited is expected to under-perform the BCM Resources. But the otc stock apears to be less risky and, when comparing its historical volatility, Lotus Resources Limited is 2.0 times less risky than BCM Resources. The otc stock trades about -0.07 of its potential returns per unit of risk. The BCM Resources is currently generating about 0.27 of returns per unit of risk over similar time horizon. If you would invest 2.00 in BCM Resources on August 31, 2024 and sell it today you would earn a total of 1.53 from holding BCM Resources or generate 76.5% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 95.65% |
| Values | Daily Returns |
Lotus Resources Limited vs. BCM Resources
Performance |
| Timeline |
| Lotus Resources |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Insignificant
| BCM Resources |
Lotus Resources and BCM Resources Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Lotus Resources and BCM Resources
The main advantage of trading using opposite Lotus Resources and BCM Resources positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Lotus Resources position performs unexpectedly, BCM 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 BCM Resources will offset losses from the drop in BCM Resources' long position.| Lotus Resources vs. Filo Mining Corp | Lotus Resources vs. Golden Goliath Resources | Lotus Resources vs. Stria Lithium | Lotus Resources vs. Monitor Ventures |
| BCM Resources vs. Edison Cobalt Corp | BCM Resources vs. Champion Bear Resources | BCM Resources vs. Avarone Metals | BCM Resources vs. Adriatic Metals PLC |
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 Alpha Finder module to use alpha and beta coefficients to find investment opportunities after accounting for the risk.
Other Complementary Tools
| Portfolio Volatility Check portfolio volatility and analyze historical return density to properly model market risk | |
| Equity Valuation Check real value of public entities based on technical and fundamental data | |
| Bond Analysis Evaluate and analyze corporate bonds as a potential investment for your portfolios. | |
| Piotroski F Score Get Piotroski F Score based on the binary analysis strategy of nine different fundamentals | |
| Pattern Recognition Use different Pattern Recognition models to time the market across multiple global exchanges |