Correlation Between Alternative Investment and Lake Resources
Can any of the company-specific risk be diversified away by investing in both Alternative Investment 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 Alternative Investment and Lake Resources into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Alternative Investment Trust and Lake Resources NL, you can compare the effects of market volatilities on Alternative Investment 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 Alternative Investment with a short position of Lake Resources. Check out your portfolio center. Please also check ongoing floating volatility patterns of Alternative Investment and Lake Resources.
Diversification Opportunities for Alternative Investment and Lake Resources
-0.63 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Alternative and Lake is -0.63. Overlapping area represents the amount of risk that can be diversified away by holding Alternative Investment Trust 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 Alternative Investment 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 Alternative Investment Trust 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 Alternative Investment i.e., Alternative Investment and Lake Resources go up and down completely randomly.
Pair Corralation between Alternative Investment and Lake Resources
If you would invest 147.00 in Alternative Investment Trust on December 5, 2024 and sell it today you would earn a total of 0.00 from holding Alternative Investment Trust or generate 0.0% return on investment over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Against |
Strength | Weak |
Accuracy | 95.65% |
Values | Daily Returns |
Alternative Investment Trust vs. Lake Resources NL
Performance |
Timeline |
Alternative Investment |
Lake Resources NL |
Alternative Investment and Lake Resources Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with Alternative Investment and Lake Resources
The main advantage of trading using opposite Alternative Investment and Lake Resources positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Alternative Investment 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.Alternative Investment vs. Duketon Mining | Alternative Investment vs. Evolution Mining | Alternative Investment vs. Peel Mining | Alternative Investment vs. Perseus Mining |
Lake Resources vs. EROAD | Lake Resources vs. Retail Food Group | Lake Resources vs. Qbe Insurance Group | Lake Resources vs. Macquarie Bank Limited |
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 Analyst Advice module to analyst recommendations and target price estimates broken down by several categories.
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