Correlation Between Lucara Diamond and Triple Flag
Can any of the company-specific risk be diversified away by investing in both Lucara Diamond and Triple Flag 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 Triple Flag 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 Triple Flag Precious, you can compare the effects of market volatilities on Lucara Diamond and Triple Flag 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 Triple Flag. Check out your portfolio center. Please also check ongoing floating volatility patterns of Lucara Diamond and Triple Flag.
Diversification Opportunities for Lucara Diamond and Triple Flag
0.49 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Lucara and Triple is 0.49. Overlapping area represents the amount of risk that can be diversified away by holding Lucara Diamond Corp and Triple Flag Precious in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Triple Flag Precious 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 Triple Flag. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Triple Flag Precious has no effect on the direction of Lucara Diamond i.e., Lucara Diamond and Triple Flag go up and down completely randomly.
Pair Corralation between Lucara Diamond and Triple Flag
Assuming the 90 days horizon Lucara Diamond Corp is expected to generate 2.84 times more return on investment than Triple Flag. However, Lucara Diamond is 2.84 times more volatile than Triple Flag Precious. It trades about 0.11 of its potential returns per unit of risk. Triple Flag Precious is currently generating about 0.09 per unit of risk. If you would invest 35.00 in Lucara Diamond Corp on September 13, 2024 and sell it today you would earn a total of 3.00 from holding Lucara Diamond Corp or generate 8.57% 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. Triple Flag Precious
Performance |
| Timeline |
| Lucara Diamond Corp |
| Triple Flag Precious |
Lucara Diamond and Triple Flag Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Lucara Diamond and Triple Flag
The main advantage of trading using opposite Lucara Diamond and Triple Flag positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Lucara Diamond position performs unexpectedly, Triple Flag 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 Triple Flag will offset losses from the drop in Triple Flag's long position.| Lucara Diamond vs. Thunder Mountain Gold | Lucara Diamond vs. Gatos Silver | Lucara Diamond vs. Triple Flag Precious | Lucara Diamond vs. Libero Copper Gold |
| Triple Flag vs. Metalla Royalty Streaming | Triple Flag vs. Endeavour Silver Corp | Triple Flag vs. SilverCrest Metals | Triple Flag vs. Gatos 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 Analyst Advice module to analyst recommendations and target price estimates broken down by several categories.
Other Complementary Tools
| Share Portfolio Track or share privately all of your investments from the convenience of any device | |
| Fundamental Analysis View fundamental data based on most recent published financial statements | |
| Bollinger Bands Use Bollinger Bands indicator to analyze target price for a given investing horizon | |
| Analyst Advice Analyst recommendations and target price estimates broken down by several categories | |
| Correlation Analysis Reduce portfolio risk simply by holding instruments which are not perfectly correlated |