Correlation Between Lomiko Metals and New Energy
Can any of the company-specific risk be diversified away by investing in both Lomiko Metals and New Energy 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 Lomiko Metals and New Energy into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Lomiko Metals and New Energy Metals, you can compare the effects of market volatilities on Lomiko Metals and New Energy 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 Lomiko Metals with a short position of New Energy. Check out your portfolio center. Please also check ongoing floating volatility patterns of Lomiko Metals and New Energy.
Diversification Opportunities for Lomiko Metals and New Energy
-0.12 | Correlation Coefficient |
Good diversification
The 3 months correlation between Lomiko and New is -0.12. Overlapping area represents the amount of risk that can be diversified away by holding Lomiko Metals and New Energy Metals in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on New Energy Metals and Lomiko 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 Lomiko Metals are associated (or correlated) with New Energy. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of New Energy Metals has no effect on the direction of Lomiko Metals i.e., Lomiko Metals and New Energy go up and down completely randomly.
Pair Corralation between Lomiko Metals and New Energy
Assuming the 90 days horizon Lomiko Metals is expected to generate 0.46 times more return on investment than New Energy. However, Lomiko Metals is 2.19 times less risky than New Energy. It trades about 0.26 of its potential returns per unit of risk. New Energy Metals is currently generating about -0.22 per unit of risk. If you would invest 8.00 in Lomiko Metals on November 22, 2024 and sell it today you would earn a total of 4.00 from holding Lomiko Metals or generate 50.0% return on investment over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Against |
Strength | Insignificant |
Accuracy | 100.0% |
Values | Daily Returns |
Lomiko Metals vs. New Energy Metals
Performance |
Timeline |
Lomiko Metals |
New Energy Metals |
Lomiko Metals and New Energy Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with Lomiko Metals and New Energy
The main advantage of trading using opposite Lomiko Metals and New Energy positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Lomiko Metals position performs unexpectedly, New Energy 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 New Energy will offset losses from the drop in New Energy's long position.Lomiko Metals vs. ZincX Resources Corp | ||
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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 Portfolio Analyzer module to portfolio analysis module that provides access to portfolio diagnostics and optimization engine.
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