Correlation Between Nuinsco Resources and Lomiko Metals
Can any of the company-specific risk be diversified away by investing in both Nuinsco Resources and Lomiko Metals 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 Nuinsco Resources and Lomiko Metals into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Nuinsco Resources Limited and Lomiko Metals, you can compare the effects of market volatilities on Nuinsco Resources and Lomiko Metals 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 Nuinsco Resources with a short position of Lomiko Metals. Check out your portfolio center. Please also check ongoing floating volatility patterns of Nuinsco Resources and Lomiko Metals.
Diversification Opportunities for Nuinsco Resources and Lomiko Metals
0.38 | Correlation Coefficient |
Weak diversification
The 3 months correlation between Nuinsco and Lomiko is 0.38. Overlapping area represents the amount of risk that can be diversified away by holding Nuinsco Resources Limited and Lomiko Metals in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Lomiko Metals and Nuinsco 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 Nuinsco Resources Limited are associated (or correlated) with Lomiko Metals. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Lomiko Metals has no effect on the direction of Nuinsco Resources i.e., Nuinsco Resources and Lomiko Metals go up and down completely randomly.
Pair Corralation between Nuinsco Resources and Lomiko Metals
Assuming the 90 days horizon Nuinsco Resources Limited is expected to generate 2.74 times more return on investment than Lomiko Metals. However, Nuinsco Resources is 2.74 times more volatile than Lomiko Metals. It trades about 0.03 of its potential returns per unit of risk. Lomiko Metals is currently generating about -0.15 per unit of risk. If you would invest 0.39 in Nuinsco Resources Limited on August 25, 2024 and sell it today you would lose (0.24) from holding Nuinsco Resources Limited or give up 61.54% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Nuinsco Resources Limited vs. Lomiko Metals
Performance |
| Timeline |
| Nuinsco Resources |
| Lomiko Metals |
Nuinsco Resources and Lomiko Metals Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Nuinsco Resources and Lomiko Metals
The main advantage of trading using opposite Nuinsco Resources and Lomiko Metals positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Nuinsco Resources position performs unexpectedly, Lomiko Metals 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 Lomiko Metals will offset losses from the drop in Lomiko Metals' long position.| Nuinsco Resources vs. Newport Gold | Nuinsco Resources vs. Monarca Minerals | Nuinsco Resources vs. First American Silver | Nuinsco Resources vs. Tamino Minerals |
| Lomiko Metals vs. Norra Metals Corp | Lomiko Metals vs. ZincX Resources Corp | Lomiko Metals vs. Nuinsco Resources Limited | Lomiko Metals vs. South Star Battery |
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 Stocks Directory module to find actively traded stocks across global markets.
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