Correlation Between Saint Jean and Lynas Rare
Can any of the company-specific risk be diversified away by investing in both Saint Jean and Lynas Rare 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 Saint Jean and Lynas Rare into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Saint Jean Carbon and Lynas Rare Earths, you can compare the effects of market volatilities on Saint Jean and Lynas Rare 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 Saint Jean with a short position of Lynas Rare. Check out your portfolio center. Please also check ongoing floating volatility patterns of Saint Jean and Lynas Rare.
Diversification Opportunities for Saint Jean and Lynas Rare
-0.53 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Saint and Lynas is -0.53. Overlapping area represents the amount of risk that can be diversified away by holding Saint Jean Carbon and Lynas Rare Earths in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Lynas Rare Earths and Saint Jean 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 Saint Jean Carbon are associated (or correlated) with Lynas Rare. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Lynas Rare Earths has no effect on the direction of Saint Jean i.e., Saint Jean and Lynas Rare go up and down completely randomly.
Pair Corralation between Saint Jean and Lynas Rare
Assuming the 90 days horizon Saint Jean Carbon is expected to generate 4.62 times more return on investment than Lynas Rare. However, Saint Jean is 4.62 times more volatile than Lynas Rare Earths. It trades about 0.03 of its potential returns per unit of risk. Lynas Rare Earths is currently generating about -0.01 per unit of risk. If you would invest 4.97 in Saint Jean Carbon on September 4, 2024 and sell it today you would lose (3.18) from holding Saint Jean Carbon or give up 63.98% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Saint Jean Carbon vs. Lynas Rare Earths
Performance |
| Timeline |
| Saint Jean Carbon |
| Lynas Rare Earths |
Saint Jean and Lynas Rare Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Saint Jean and Lynas Rare
The main advantage of trading using opposite Saint Jean and Lynas Rare positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Saint Jean position performs unexpectedly, Lynas Rare 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 Lynas Rare will offset losses from the drop in Lynas Rare's long position.| Saint Jean vs. Qubec Nickel Corp | Saint Jean vs. IGO Limited | Saint Jean vs. Avarone Metals | Saint Jean vs. Adriatic Metals PLC |
| Lynas Rare vs. Arafura Resources | Lynas Rare vs. Texas Rare Earth | Lynas Rare vs. Ucore Rare Metals | Lynas Rare vs. Lynas Rare Earths |
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 Economic Indicators module to top statistical indicators that provide insights into how an economy is performing.
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