Correlation Between Astar and LEO LITHIUM
Can any of the company-specific risk be diversified away by investing in both Astar and LEO LITHIUM 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 Astar and LEO LITHIUM into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Astar and LEO LITHIUM LTD, you can compare the effects of market volatilities on Astar and LEO LITHIUM 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 Astar with a short position of LEO LITHIUM. Check out your portfolio center. Please also check ongoing floating volatility patterns of Astar and LEO LITHIUM.
Diversification Opportunities for Astar and LEO LITHIUM
0.0 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between Astar and LEO is 0.0. Overlapping area represents the amount of risk that can be diversified away by holding Astar and LEO LITHIUM LTD in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on LEO LITHIUM LTD and Astar 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 Astar are associated (or correlated) with LEO LITHIUM. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of LEO LITHIUM LTD has no effect on the direction of Astar i.e., Astar and LEO LITHIUM go up and down completely randomly.
Pair Corralation between Astar and LEO LITHIUM
If you would invest 5.98 in Astar on October 9, 2024 and sell it today you would earn a total of 0.75 from holding Astar or generate 12.54% return on investment over 90 days.
Time Period | 3 Months [change] |
Direction | Flat |
Strength | Insignificant |
Accuracy | 88.1% |
Values | Daily Returns |
Astar vs. LEO LITHIUM LTD
Performance |
Timeline |
Astar |
LEO LITHIUM LTD |
Astar and LEO LITHIUM Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with Astar and LEO LITHIUM
The main advantage of trading using opposite Astar and LEO LITHIUM positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Astar position performs unexpectedly, LEO LITHIUM 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 LEO LITHIUM will offset losses from the drop in LEO LITHIUM's long position.The idea behind Astar and LEO LITHIUM LTD 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.LEO LITHIUM vs. Norwegian Air Shuttle | LEO LITHIUM vs. Summit Materials | LEO LITHIUM vs. SOGECLAIR SA INH | LEO LITHIUM vs. FORWARD AIR P |
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 Portfolio Anywhere module to track or share privately all of your investments from the convenience of any device.
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