Correlation Between Lucara Diamond and Sileon AB
Can any of the company-specific risk be diversified away by investing in both Lucara Diamond and Sileon AB 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 Lucara Diamond and Sileon AB into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Lucara Diamond Corp and Sileon AB, you can compare the effects of market volatilities on Lucara Diamond and Sileon AB 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 Lucara Diamond with a short position of Sileon AB. Check out your portfolio center. Please also check ongoing floating volatility patterns of Lucara Diamond and Sileon AB.
Diversification Opportunities for Lucara Diamond and Sileon AB
0.32 | Correlation Coefficient |
Weak diversification
The 3 months correlation between Lucara and Sileon is 0.32. Overlapping area represents the amount of risk that can be diversified away by holding Lucara Diamond Corp and Sileon AB in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Sileon AB and Lucara Diamond 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 Lucara Diamond Corp are associated (or correlated) with Sileon AB. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Sileon AB has no effect on the direction of Lucara Diamond i.e., Lucara Diamond and Sileon AB go up and down completely randomly.
Pair Corralation between Lucara Diamond and Sileon AB
Assuming the 90 days trading horizon Lucara Diamond Corp is expected to generate 0.5 times more return on investment than Sileon AB. However, Lucara Diamond Corp is 2.0 times less risky than Sileon AB. It trades about -0.01 of its potential returns per unit of risk. Sileon AB is currently generating about -0.08 per unit of risk. If you would invest 509.00 in Lucara Diamond Corp on October 12, 2024 and sell it today you would lose (162.00) from holding Lucara Diamond Corp or give up 31.83% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 99.8% |
| Values | Daily Returns |
Lucara Diamond Corp vs. Sileon AB
Performance |
| Timeline |
| Lucara Diamond Corp |
| Sileon AB |
Lucara Diamond and Sileon AB Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Lucara Diamond and Sileon AB
The main advantage of trading using opposite Lucara Diamond and Sileon AB positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Lucara Diamond position performs unexpectedly, Sileon AB 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 Sileon AB will offset losses from the drop in Sileon AB's long position.| Lucara Diamond vs. Leading Edge Materials | Lucara Diamond vs. Alzinova AB | Lucara Diamond vs. SaltX Technology Holding | Lucara Diamond vs. KABE Group AB |
| Sileon AB vs. Invisio Communications AB | Sileon AB vs. Online Brands Nordic | Sileon AB vs. Redsense Medical AB | Sileon AB vs. Axfood AB |
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 Premium Stories module to follow Macroaxis premium stories from verified contributors across different equity types, categories and coverage scope.
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