Correlation Between Lynas Rare and Interra Copper
Can any of the company-specific risk be diversified away by investing in both Lynas Rare and Interra 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 Lynas Rare and Interra Copper into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Lynas Rare Earths and Interra Copper Corp, you can compare the effects of market volatilities on Lynas Rare and Interra 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 Lynas Rare with a short position of Interra Copper. Check out your portfolio center. Please also check ongoing floating volatility patterns of Lynas Rare and Interra Copper.
Diversification Opportunities for Lynas Rare and Interra Copper
0.24 | Correlation Coefficient |
Modest diversification
The 3 months correlation between Lynas and Interra is 0.24. Overlapping area represents the amount of risk that can be diversified away by holding Lynas Rare Earths and Interra Copper Corp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Interra Copper Corp and Lynas Rare 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 Lynas Rare Earths are associated (or correlated) with Interra Copper. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Interra Copper Corp has no effect on the direction of Lynas Rare i.e., Lynas Rare and Interra Copper go up and down completely randomly.
Pair Corralation between Lynas Rare and Interra Copper
Assuming the 90 days horizon Lynas Rare Earths is expected to under-perform the Interra Copper. But the pink sheet apears to be less risky and, when comparing its historical volatility, Lynas Rare Earths is 4.23 times less risky than Interra Copper. The pink sheet trades about -0.01 of its potential returns per unit of risk. The Interra Copper Corp is currently generating about 0.0 of returns per unit of risk over similar time horizon. If you would invest 60.00 in Interra Copper Corp on September 4, 2024 and sell it today you would lose (54.03) from holding Interra Copper Corp or give up 90.05% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Lynas Rare Earths vs. Interra Copper Corp
Performance |
| Timeline |
| Lynas Rare Earths |
| Interra Copper Corp |
Lynas Rare and Interra Copper Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Lynas Rare and Interra Copper
The main advantage of trading using opposite Lynas Rare and Interra Copper positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Lynas Rare position performs unexpectedly, Interra 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 Interra Copper will offset losses from the drop in Interra Copper's long position.| Lynas Rare vs. Arafura Resources | Lynas Rare vs. Texas Rare Earth | Lynas Rare vs. Ucore Rare Metals | Lynas Rare vs. Lynas Rare Earths |
| Interra Copper vs. Qubec Nickel Corp | Interra Copper vs. IGO Limited | Interra Copper vs. Avarone Metals | Interra Copper 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 Fundamental Analysis module to view fundamental data based on most recent published financial statements.
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