Correlation Between Liontown Resources and Glen Eagle

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

By analyzing existing cross correlation between Liontown Resources Limited and Glen Eagle Resources, you can compare the effects of market volatilities on Liontown Resources and Glen Eagle 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 Liontown Resources with a short position of Glen Eagle. Check out your portfolio center. Please also check ongoing floating volatility patterns of Liontown Resources and Glen Eagle.

Diversification Opportunities for Liontown Resources and Glen Eagle

0.0

Correlation Coefficient

Liontown Resources  Glen Eagle

Pay attention - limited upside

The 3 months correlation between Liontown and Glen is 0.0. Overlapping area represents the amount of risk that can be diversified away by holding Liontown Resources Limited and Glen Eagle Resources in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Glen Eagle Resources and Liontown 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 Liontown Resources Limited are associated (or correlated) with Glen Eagle. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Glen Eagle Resources has no effect on the direction of Liontown Resources i.e., Liontown Resources and Glen Eagle go up and down completely randomly.

Pair Corralation between Liontown Resources and Glen Eagle

If you would invest  44.00  in Liontown Resources Limited on September 3, 2024 and sell it today you would earn a total of  7.00  from holding Liontown Resources Limited or generate 15.91% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Flat
Strength	Insignificant
Accuracy	98.46%
Values	Daily Returns

Liontown Resources Limited  vs.  Glen Eagle Resources

Liontown Resources

Risk-Adjusted Performance

5 of 100

Modest

Compared to the overall equity markets, risk-adjusted returns on investments in Liontown Resources Limited are ranked lower than 5 (%) of all global equities and portfolios over the last 90 days. Despite nearly fragile basic indicators, Liontown Resources reported solid returns over the last few months and may actually be approaching a breakup point.

Glen Eagle Resources

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Glen Eagle Resources has generated negative risk-adjusted returns adding no value to investors with long positions. Despite nearly stable technical and fundamental indicators, Glen Eagle is not utilizing all of its potentials. The current stock price disturbance, may contribute to mid-run losses for the stockholders.

Pair Trading with Liontown Resources and Glen Eagle

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

The idea behind Liontown Resources Limited and Glen Eagle Resources 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 Portfolio Manager module to state of the art Portfolio Manager to monitor and improve performance of your invested capital.