Correlation Between Lake Resources and Finexia Financial
Can any of the company-specific risk be diversified away by investing in both Lake Resources and Finexia Financial 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 Lake Resources and Finexia Financial into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Lake Resources NL and Finexia Financial Group, you can compare the effects of market volatilities on Lake Resources and Finexia Financial 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 Lake Resources with a short position of Finexia Financial. Check out your portfolio center. Please also check ongoing floating volatility patterns of Lake Resources and Finexia Financial.
Diversification Opportunities for Lake Resources and Finexia Financial
0.39 | Correlation Coefficient |
Weak diversification
The 3 months correlation between Lake and Finexia is 0.39. Overlapping area represents the amount of risk that can be diversified away by holding Lake Resources NL and Finexia Financial Group in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Finexia Financial and Lake 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 Lake Resources NL are associated (or correlated) with Finexia Financial. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Finexia Financial has no effect on the direction of Lake Resources i.e., Lake Resources and Finexia Financial go up and down completely randomly.
Pair Corralation between Lake Resources and Finexia Financial
Assuming the 90 days trading horizon Lake Resources NL is expected to under-perform the Finexia Financial. In addition to that, Lake Resources is 1.27 times more volatile than Finexia Financial Group. It trades about -0.11 of its total potential returns per unit of risk. Finexia Financial Group is currently generating about -0.01 per unit of volatility. If you would invest 31.00 in Finexia Financial Group on November 24, 2024 and sell it today you would lose (1.00) from holding Finexia Financial Group or give up 3.23% of portfolio value over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Together |
Strength | Very Weak |
Accuracy | 98.39% |
Values | Daily Returns |
Lake Resources NL vs. Finexia Financial Group
Performance |
Timeline |
Lake Resources NL |
Finexia Financial |
Lake Resources and Finexia Financial Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with Lake Resources and Finexia Financial
The main advantage of trading using opposite Lake Resources and Finexia Financial positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Lake Resources position performs unexpectedly, Finexia Financial 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 Finexia Financial will offset losses from the drop in Finexia Financial's long position.Lake Resources vs. Land Homes Group | ||
Lake Resources vs. Dalaroo Metals | ||
Lake Resources vs. Microequities Asset Management | ||
Lake Resources vs. EROAD |
Finexia Financial vs. IDP Education | ||
Finexia Financial vs. Djerriwarrh Investments | ||
Finexia Financial vs. Flagship Investments | ||
Finexia Financial vs. Embark Education Group |
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 Transaction History module to view history of all your transactions and understand their impact on performance.
Other Complementary Tools
Financial Widgets Easily integrated Macroaxis content with over 30 different plug-and-play financial widgets | |
Insider Screener Find insiders across different sectors to evaluate their impact on performance | |
Fundamental Analysis View fundamental data based on most recent published financial statements | |
Cryptocurrency Center Build and monitor diversified portfolio of extremely risky digital assets and cryptocurrency | |
Portfolio Backtesting Avoid under-diversification and over-optimization by backtesting your portfolios |