Correlation Between Themac Resources and Lotus Resources
Can any of the company-specific risk be diversified away by investing in both Themac Resources and Lotus 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 Themac Resources and Lotus Resources into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Themac Resources Group and Lotus Resources Limited, you can compare the effects of market volatilities on Themac Resources and Lotus 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 Themac Resources with a short position of Lotus Resources. Check out your portfolio center. Please also check ongoing floating volatility patterns of Themac Resources and Lotus Resources.
Diversification Opportunities for Themac Resources and Lotus Resources
0.39 | Correlation Coefficient |
Weak diversification
The 3 months correlation between Themac and Lotus is 0.39. Overlapping area represents the amount of risk that can be diversified away by holding Themac Resources Group and Lotus Resources Limited in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Lotus Resources and Themac 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 Themac Resources Group are associated (or correlated) with Lotus Resources. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Lotus Resources has no effect on the direction of Themac Resources i.e., Themac Resources and Lotus Resources go up and down completely randomly.
Pair Corralation between Themac Resources and Lotus Resources
Assuming the 90 days horizon Themac Resources Group is expected to generate 2.63 times more return on investment than Lotus Resources. However, Themac Resources is 2.63 times more volatile than Lotus Resources Limited. It trades about 0.22 of its potential returns per unit of risk. Lotus Resources Limited is currently generating about -0.02 per unit of risk. If you would invest 2.50 in Themac Resources Group on September 1, 2024 and sell it today you would earn a total of 1.70 from holding Themac Resources Group or generate 68.0% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Themac Resources Group vs. Lotus Resources Limited
Performance |
| Timeline |
| Themac Resources |
| Lotus Resources |
Themac Resources and Lotus Resources Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Themac Resources and Lotus Resources
The main advantage of trading using opposite Themac Resources and Lotus Resources positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Themac Resources position performs unexpectedly, Lotus 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 Lotus Resources will offset losses from the drop in Lotus Resources' long position.| Themac Resources vs. South32 Limited | Themac Resources vs. NioCorp Developments Ltd | Themac Resources vs. HUMANA INC | Themac Resources vs. SCOR PK |
| Lotus Resources vs. Filo Mining Corp | Lotus Resources vs. Golden Goliath Resources | Lotus Resources vs. Stria Lithium | Lotus Resources vs. Monitor Ventures |
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 Headlines Timeline module to stay connected to all market stories and filter out noise. Drill down to analyze hype elasticity.
Other Complementary Tools
| Premium Stories Follow Macroaxis premium stories from verified contributors across different equity types, categories and coverage scope | |
| Portfolio Anywhere Track or share privately all of your investments from the convenience of any device | |
| Economic Indicators Top statistical indicators that provide insights into how an economy is performing | |
| Bonds Directory Find actively traded corporate debentures issued by US companies | |
| Idea Analyzer Analyze all characteristics, volatility and risk-adjusted return of Macroaxis ideas |