Correlation Between Axelum Resources and Lepanto Consolidated

Can any of the company-specific risk be diversified away by investing in both Axelum Resources and Lepanto Consolidated 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 Axelum Resources and Lepanto Consolidated into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between Axelum Resources Corp and Lepanto Consolidated Mining, you can compare the effects of market volatilities on Axelum Resources and Lepanto Consolidated 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 Axelum Resources with a short position of Lepanto Consolidated. Check out your portfolio center. Please also check ongoing floating volatility patterns of Axelum Resources and Lepanto Consolidated.

Diversification Opportunities for Axelum Resources and Lepanto Consolidated

0.02

Correlation Coefficient

Axelum Resources  Lepanto Consolidated

Significant diversification

The 3 months correlation between Axelum and Lepanto is 0.02. Overlapping area represents the amount of risk that can be diversified away by holding Axelum Resources Corp and Lepanto Consolidated Mining in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Lepanto Consolidated and Axelum Resources 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 Axelum Resources Corp are associated (or correlated) with Lepanto Consolidated. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Lepanto Consolidated has no effect on the direction of Axelum Resources i.e., Axelum Resources and Lepanto Consolidated go up and down completely randomly.

Pair Corralation between Axelum Resources and Lepanto Consolidated

Assuming the 90 days trading horizon Axelum Resources Corp is expected to generate 0.77 times more return on investment than Lepanto Consolidated. However, Axelum Resources Corp is 1.3 times less risky than Lepanto Consolidated. It trades about 0.0 of its potential returns per unit of risk. Lepanto Consolidated Mining is currently generating about -0.01 per unit of risk. If you would invest  224.00  in Axelum Resources Corp on September 24, 2024 and sell it today you would lose (16.00) from holding Axelum Resources Corp or give up 7.14% of portfolio value over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Insignificant
Accuracy	85.06%
Values	Daily Returns

Axelum Resources Corp  vs.  Lepanto Consolidated Mining

Axelum Resources Corp

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Axelum Resources Corp has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of comparatively stable basic indicators, Axelum Resources is not utilizing all of its potentials. The newest stock price uproar, may contribute to short-horizon losses for the private investors.

Lepanto Consolidated

Risk-Adjusted Performance

4 of 100

Insignificant

Compared to the overall equity markets, risk-adjusted returns on investments in Lepanto Consolidated Mining are ranked lower than 4 (%) of all global equities and portfolios over the last 90 days. In spite of rather unsteady technical and fundamental indicators, Lepanto Consolidated exhibited solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Axelum Resources and Lepanto Consolidated

The main advantage of trading using opposite Axelum Resources and Lepanto Consolidated positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Axelum Resources position performs unexpectedly, Lepanto Consolidated 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 Lepanto Consolidated will offset losses from the drop in Lepanto Consolidated's long position.

The idea behind Axelum Resources Corp and Lepanto Consolidated Mining 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.

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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.