Correlation Between Lucara Diamond and Libero Copper
Can any of the company-specific risk be diversified away by investing in both Lucara Diamond and Libero 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 Lucara Diamond and Libero Copper 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 Libero Copper Gold, you can compare the effects of market volatilities on Lucara Diamond and Libero 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 Lucara Diamond with a short position of Libero Copper. Check out your portfolio center. Please also check ongoing floating volatility patterns of Lucara Diamond and Libero Copper.
Diversification Opportunities for Lucara Diamond and Libero Copper
0.54 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Lucara and Libero is 0.54. Overlapping area represents the amount of risk that can be diversified away by holding Lucara Diamond Corp and Libero Copper Gold in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Libero Copper Gold 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 Libero Copper. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Libero Copper Gold has no effect on the direction of Lucara Diamond i.e., Lucara Diamond and Libero Copper go up and down completely randomly.
Pair Corralation between Lucara Diamond and Libero Copper
Assuming the 90 days horizon Lucara Diamond Corp is expected to generate 0.76 times more return on investment than Libero Copper. However, Lucara Diamond Corp is 1.32 times less risky than Libero Copper. It trades about 0.07 of its potential returns per unit of risk. Libero Copper Gold is currently generating about 0.01 per unit of risk. If you would invest 25.00 in Lucara Diamond Corp on September 3, 2024 and sell it today you would earn a total of 10.00 from holding Lucara Diamond Corp or generate 40.0% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Lucara Diamond Corp vs. Libero Copper Gold
Performance |
| Timeline |
| Lucara Diamond Corp |
| Libero Copper Gold |
Lucara Diamond and Libero Copper Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Lucara Diamond and Libero Copper
The main advantage of trading using opposite Lucara Diamond and Libero Copper positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Lucara Diamond position performs unexpectedly, Libero 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 Libero Copper will offset losses from the drop in Libero Copper's long position.| Lucara Diamond vs. Advantage Solutions | Lucara Diamond vs. Atlas Corp | Lucara Diamond vs. PureCycle Technologies | Lucara Diamond vs. WM Technology |
| Libero Copper vs. McEwen Mining | Libero Copper vs. Hecla Mining | Libero Copper vs. Lucara Diamond Corp | Libero Copper vs. Clifton Mining Co |
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 Correlation Analysis module to reduce portfolio risk simply by holding instruments which are not perfectly correlated.
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