Correlation Between Ora Banda and L1 Long
Can any of the company-specific risk be diversified away by investing in both Ora Banda and L1 Long 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 Ora Banda and L1 Long into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Ora Banda Mining and L1 Long Short, you can compare the effects of market volatilities on Ora Banda and L1 Long 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 Ora Banda with a short position of L1 Long. Check out your portfolio center. Please also check ongoing floating volatility patterns of Ora Banda and L1 Long.
Diversification Opportunities for Ora Banda and L1 Long
Poor diversification
The 3 months correlation between Ora and LSF is 0.64. Overlapping area represents the amount of risk that can be diversified away by holding Ora Banda Mining and L1 Long Short in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on L1 Long Short and Ora Banda 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 Ora Banda Mining are associated (or correlated) with L1 Long. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of L1 Long Short has no effect on the direction of Ora Banda i.e., Ora Banda and L1 Long go up and down completely randomly.
Pair Corralation between Ora Banda and L1 Long
Assuming the 90 days trading horizon Ora Banda Mining is expected to generate 4.42 times more return on investment than L1 Long. However, Ora Banda is 4.42 times more volatile than L1 Long Short. It trades about 0.12 of its potential returns per unit of risk. L1 Long Short is currently generating about 0.05 per unit of risk. If you would invest 6.90 in Ora Banda Mining on September 3, 2024 and sell it today you would earn a total of 66.10 from holding Ora Banda Mining or generate 957.97% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Ora Banda Mining vs. L1 Long Short
Performance |
| Timeline |
| Ora Banda Mining |
| L1 Long Short |
Ora Banda and L1 Long Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Ora Banda and L1 Long
The main advantage of trading using opposite Ora Banda and L1 Long positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Ora Banda position performs unexpectedly, L1 Long 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 L1 Long will offset losses from the drop in L1 Long's long position.| Ora Banda vs. Northern Star Resources | Ora Banda vs. Evolution Mining | Ora Banda vs. Bluescope Steel | Ora Banda vs. Aneka Tambang Tbk |
| L1 Long vs. Truscott Mining Corp | L1 Long vs. Retail Food Group | L1 Long vs. Viva Leisure | L1 Long vs. Evolution Mining |
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 Bonds Directory module to find actively traded corporate debentures issued by US companies.
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