Correlation Between RLF AgTech and Lindian Resources
Can any of the company-specific risk be diversified away by investing in both RLF AgTech and Lindian 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 RLF AgTech and Lindian Resources into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between RLF AgTech and Lindian Resources, you can compare the effects of market volatilities on RLF AgTech and Lindian 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 RLF AgTech with a short position of Lindian Resources. Check out your portfolio center. Please also check ongoing floating volatility patterns of RLF AgTech and Lindian Resources.
Diversification Opportunities for RLF AgTech and Lindian Resources
-0.43 | Correlation Coefficient |
Very good diversification
The 3 months correlation between RLF and Lindian is -0.43. Overlapping area represents the amount of risk that can be diversified away by holding RLF AgTech and Lindian Resources in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Lindian Resources and RLF AgTech 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 RLF AgTech are associated (or correlated) with Lindian Resources. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Lindian Resources has no effect on the direction of RLF AgTech i.e., RLF AgTech and Lindian Resources go up and down completely randomly.
Pair Corralation between RLF AgTech and Lindian Resources
Assuming the 90 days trading horizon RLF AgTech is expected to under-perform the Lindian Resources. But the stock apears to be less risky and, when comparing its historical volatility, RLF AgTech is 1.83 times less risky than Lindian Resources. The stock trades about -0.17 of its potential returns per unit of risk. The Lindian Resources is currently generating about 0.05 of returns per unit of risk over similar time horizon. If you would invest 9.60 in Lindian Resources on August 31, 2024 and sell it today you would earn a total of 0.20 from holding Lindian Resources or generate 2.08% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
RLF AgTech vs. Lindian Resources
Performance |
| Timeline |
| RLF AgTech |
| Lindian Resources |
RLF AgTech and Lindian Resources Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with RLF AgTech and Lindian Resources
The main advantage of trading using opposite RLF AgTech and Lindian Resources positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if RLF AgTech position performs unexpectedly, Lindian 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 Lindian Resources will offset losses from the drop in Lindian Resources' long position.| RLF AgTech vs. Cleanaway Waste Management | RLF AgTech vs. Sandon Capital Investments | RLF AgTech vs. K2 Asset Management | RLF AgTech vs. Hudson Investment Group |
| Lindian Resources vs. Kneomedia | Lindian Resources vs. RLF AgTech | Lindian Resources vs. ARN Media Limited | Lindian Resources vs. Genetic Technologies |
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 Global Correlations module to find global opportunities by holding instruments from different markets.
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