Correlation Between OMX Stockholm and Lucara Diamond
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By analyzing existing cross correlation between OMX Stockholm Mid and Lucara Diamond Corp, you can compare the effects of market volatilities on OMX Stockholm and Lucara Diamond 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 OMX Stockholm with a short position of Lucara Diamond. Check out your portfolio center. Please also check ongoing floating volatility patterns of OMX Stockholm and Lucara Diamond.
Diversification Opportunities for OMX Stockholm and Lucara Diamond
-0.04 | Correlation Coefficient |
Good diversification
The 3 months correlation between OMX and Lucara is -0.04. Overlapping area represents the amount of risk that can be diversified away by holding OMX Stockholm Mid and Lucara Diamond Corp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Lucara Diamond Corp and OMX Stockholm 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 OMX Stockholm Mid are associated (or correlated) with Lucara Diamond. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Lucara Diamond Corp has no effect on the direction of OMX Stockholm i.e., OMX Stockholm and Lucara Diamond go up and down completely randomly.
Pair Corralation between OMX Stockholm and Lucara Diamond
Assuming the 90 days trading horizon OMX Stockholm Mid is expected to under-perform the Lucara Diamond. But the index apears to be less risky and, when comparing its historical volatility, OMX Stockholm Mid is 6.15 times less risky than Lucara Diamond. The index trades about -0.07 of its potential returns per unit of risk. The Lucara Diamond Corp is currently generating about 0.02 of returns per unit of risk over similar time horizon. If you would invest 395.00 in Lucara Diamond Corp on September 1, 2024 and sell it today you would lose (1.00) from holding Lucara Diamond Corp or give up 0.25% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 95.65% |
| Values | Daily Returns |
OMX Stockholm Mid vs. Lucara Diamond Corp
Performance |
| Timeline |
OMX Stockholm and Lucara Diamond Volatility Contrast
Predicted Return Density |
| Returns |
OMX Stockholm Mid
Pair trading matchups for OMX Stockholm
Lucara Diamond Corp
Pair trading matchups for Lucara Diamond
Pair Trading with OMX Stockholm and Lucara Diamond
The main advantage of trading using opposite OMX Stockholm and Lucara Diamond positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if OMX Stockholm position performs unexpectedly, Lucara Diamond 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 Lucara Diamond will offset losses from the drop in Lucara Diamond's long position.| OMX Stockholm vs. Beowulf Mining PLC | OMX Stockholm vs. Swedbank AB | OMX Stockholm vs. Arion banki hf | OMX Stockholm vs. TradeDoubler AB |
| Lucara Diamond vs. Africa Oil Corp | Lucara Diamond vs. Lundin Gold | Lucara Diamond vs. Lundin Mining | Lucara Diamond vs. Inwido AB |
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 Content Syndication module to quickly integrate customizable finance content to your own investment portal.
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