Correlation Between DY6 Metals and Lykos Metals
Can any of the company-specific risk be diversified away by investing in both DY6 Metals 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 DY6 Metals and Lykos Metals into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between DY6 Metals and Lykos Metals, you can compare the effects of market volatilities on DY6 Metals 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 DY6 Metals with a short position of Lykos Metals. Check out your portfolio center. Please also check ongoing floating volatility patterns of DY6 Metals and Lykos Metals.
Diversification Opportunities for DY6 Metals and Lykos Metals
0.79 | Correlation Coefficient |
Poor diversification
The 3 months correlation between DY6 and Lykos is 0.79. Overlapping area represents the amount of risk that can be diversified away by holding DY6 Metals and Lykos Metals in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Lykos Metals and DY6 Metals 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 DY6 Metals 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 DY6 Metals i.e., DY6 Metals and Lykos Metals go up and down completely randomly.
Pair Corralation between DY6 Metals and Lykos Metals
Assuming the 90 days trading horizon DY6 Metals is expected to generate 0.72 times more return on investment than Lykos Metals. However, DY6 Metals is 1.39 times less risky than Lykos Metals. It trades about -0.19 of its potential returns per unit of risk. Lykos Metals is currently generating about -0.22 per unit of risk. If you would invest 5.50 in DY6 Metals on October 6, 2024 and sell it today you would lose (1.40) from holding DY6 Metals or give up 25.45% of portfolio value over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Together |
Strength | Significant |
Accuracy | 100.0% |
Values | Daily Returns |
DY6 Metals vs. Lykos Metals
Performance |
Timeline |
DY6 Metals |
Lykos Metals |
DY6 Metals and Lykos Metals Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with DY6 Metals and Lykos Metals
The main advantage of trading using opposite DY6 Metals and Lykos Metals positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if DY6 Metals 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.DY6 Metals vs. Falcon Metals | DY6 Metals vs. Home Consortium | DY6 Metals vs. Aurelia Metals | DY6 Metals vs. Black Rock Mining |
Lykos Metals vs. Sandon Capital Investments | Lykos Metals vs. Hudson Investment Group | Lykos Metals vs. K2 Asset Management | Lykos Metals vs. IDP Education |
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 Fundamental Analysis module to view fundamental data based on most recent published financial statements.
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