Correlation Between Sunlands Technology and Lake Resources
Can any of the company-specific risk be diversified away by investing in both Sunlands Technology and Lake 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 Sunlands Technology and Lake Resources into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Sunlands Technology Group and Lake Resources NL, you can compare the effects of market volatilities on Sunlands Technology and Lake 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 Sunlands Technology with a short position of Lake Resources. Check out your portfolio center. Please also check ongoing floating volatility patterns of Sunlands Technology and Lake Resources.
Diversification Opportunities for Sunlands Technology and Lake Resources
0.61 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Sunlands and Lake is 0.61. Overlapping area represents the amount of risk that can be diversified away by holding Sunlands Technology Group and Lake Resources NL in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Lake Resources NL and Sunlands Technology 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 Sunlands Technology Group are associated (or correlated) with Lake Resources. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Lake Resources NL has no effect on the direction of Sunlands Technology i.e., Sunlands Technology and Lake Resources go up and down completely randomly.
Pair Corralation between Sunlands Technology and Lake Resources
Considering the 90-day investment horizon Sunlands Technology Group is expected to generate 0.77 times more return on investment than Lake Resources. However, Sunlands Technology Group is 1.3 times less risky than Lake Resources. It trades about 0.01 of its potential returns per unit of risk. Lake Resources NL is currently generating about -0.03 per unit of risk. If you would invest 1,369 in Sunlands Technology Group on October 25, 2024 and sell it today you would lose (683.00) from holding Sunlands Technology Group or give up 49.89% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 99.6% |
| Values | Daily Returns |
Sunlands Technology Group vs. Lake Resources NL
Performance |
| Timeline |
| Sunlands Technology |
| Lake Resources NL |
Sunlands Technology and Lake Resources Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Sunlands Technology and Lake Resources
The main advantage of trading using opposite Sunlands Technology and Lake Resources positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Sunlands Technology position performs unexpectedly, Lake 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 Lake Resources will offset losses from the drop in Lake Resources' long position.| Sunlands Technology vs. Exceed World | Sunlands Technology vs. American Public Education | Sunlands Technology vs. Ihuman Inc | Sunlands Technology vs. Adtalem Global Education |
| Lake Resources vs. Transportadora de Gas | Lake Resources vs. Summit Midstream | Lake Resources vs. CDW Corp | Lake Resources vs. Definitive Healthcare Corp |
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 Sign In To Macroaxis module to sign in to explore Macroaxis' wealth optimization platform and fintech modules.
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