Correlation Between Lake Resources and Pinnacle Investment
Can any of the company-specific risk be diversified away by investing in both Lake Resources and Pinnacle Investment 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 Pinnacle Investment 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 Pinnacle Investment Management, you can compare the effects of market volatilities on Lake Resources and Pinnacle Investment 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 Pinnacle Investment. Check out your portfolio center. Please also check ongoing floating volatility patterns of Lake Resources and Pinnacle Investment.
Diversification Opportunities for Lake Resources and Pinnacle Investment
0.65 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Lake and Pinnacle is 0.65. Overlapping area represents the amount of risk that can be diversified away by holding Lake Resources NL and Pinnacle Investment Management in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Pinnacle Investment 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 Pinnacle Investment. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Pinnacle Investment has no effect on the direction of Lake Resources i.e., Lake Resources and Pinnacle Investment go up and down completely randomly.
Pair Corralation between Lake Resources and Pinnacle Investment
Assuming the 90 days trading horizon Lake Resources NL is expected to generate 1.53 times more return on investment than Pinnacle Investment. However, Lake Resources is 1.53 times more volatile than Pinnacle Investment Management. It trades about -0.07 of its potential returns per unit of risk. Pinnacle Investment Management is currently generating about -0.12 per unit of risk. If you would invest 4.10 in Lake Resources NL on December 29, 2024 and sell it today you would lose (0.80) from holding Lake Resources NL or give up 19.51% of portfolio value over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Together |
Strength | Significant |
Accuracy | 100.0% |
Values | Daily Returns |
Lake Resources NL vs. Pinnacle Investment Management
Performance |
Timeline |
Lake Resources NL |
Pinnacle Investment |
Lake Resources and Pinnacle Investment Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with Lake Resources and Pinnacle Investment
The main advantage of trading using opposite Lake Resources and Pinnacle Investment positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Lake Resources position performs unexpectedly, Pinnacle Investment 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 Pinnacle Investment will offset losses from the drop in Pinnacle Investment's long position.Lake Resources vs. Perpetual Credit Income | Lake Resources vs. Bailador Technology Invest | Lake Resources vs. Lendlease Group | Lake Resources vs. Thorney Technologies |
Pinnacle Investment vs. Ainsworth Game Technology | Pinnacle Investment vs. Stelar Metals | Pinnacle Investment vs. Neurotech International | Pinnacle Investment vs. Perseus Mining |
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 Piotroski F Score module to get Piotroski F Score based on the binary analysis strategy of nine different fundamentals.
Other Complementary Tools
Share Portfolio Track or share privately all of your investments from the convenience of any device | |
Financial Widgets Easily integrated Macroaxis content with over 30 different plug-and-play financial widgets | |
Performance Analysis Check effects of mean-variance optimization against your current asset allocation | |
USA ETFs Find actively traded Exchange Traded Funds (ETF) in USA | |
AI Portfolio Architect Use AI to generate optimal portfolios and find profitable investment opportunities |