Correlation Between Chia and Lykos Metals
Can any of the company-specific risk be diversified away by investing in both Chia and Lykos Metals 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 Chia and Lykos Metals into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Chia and Lykos Metals, you can compare the effects of market volatilities on Chia and Lykos Metals 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 Chia with a short position of Lykos Metals. Check out your portfolio center. Please also check ongoing floating volatility patterns of Chia and Lykos Metals.
Diversification Opportunities for Chia and Lykos Metals
-0.63 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Chia and Lykos is -0.63. Overlapping area represents the amount of risk that can be diversified away by holding Chia and Lykos Metals in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Lykos Metals and Chia 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 Chia are associated (or correlated) with Lykos Metals. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Lykos Metals has no effect on the direction of Chia i.e., Chia and Lykos Metals go up and down completely randomly.
Pair Corralation between Chia and Lykos Metals
Assuming the 90 days trading horizon Chia is expected to generate 1.3 times more return on investment than Lykos Metals. However, Chia is 1.3 times more volatile than Lykos Metals. It trades about -0.03 of its potential returns per unit of risk. Lykos Metals is currently generating about -0.23 per unit of risk. If you would invest 2,127 in Chia on October 26, 2024 and sell it today you would lose (181.00) from holding Chia or give up 8.51% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 90.48% |
| Values | Daily Returns |
Chia vs. Lykos Metals
Performance |
| Timeline |
| Chia |
| Lykos Metals |
Chia and Lykos Metals Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Chia and Lykos Metals
The main advantage of trading using opposite Chia and Lykos Metals positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Chia position performs unexpectedly, Lykos Metals 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 Lykos Metals will offset losses from the drop in Lykos Metals' long position.The idea behind Chia and Lykos Metals pairs trading is to make the combined position market-neutral, meaning the overall market's direction will not affect its win or loss (or potential downside or upside). This can be achieved by designing a pairs trade with two highly correlated stocks or equities that operate in a similar space or sector, making it possible to obtain profits through simple and relatively low-risk investment.| Lykos Metals vs. Northern Star Resources | Lykos Metals vs. Evolution Mining | Lykos Metals vs. Bluescope Steel | Lykos Metals vs. De Grey 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 Global Markets Map module to get a quick overview of global market snapshot using zoomable world map. Drill down to check world indexes.
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