Correlation Between Lykos Metals and Minbos Resources

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

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

Diversification Opportunities for Lykos Metals and Minbos Resources

0.43

Correlation Coefficient

Lykos Metals  Minbos Resources

Very weak diversification

The 3 months correlation between Lykos and Minbos is 0.43. Overlapping area represents the amount of risk that can be diversified away by holding Lykos Metals and Minbos Resources in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Minbos Resources and Lykos 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 Lykos Metals are associated (or correlated) with Minbos Resources. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Minbos Resources has no effect on the direction of Lykos Metals i.e., Lykos Metals and Minbos Resources go up and down completely randomly.

Pair Corralation between Lykos Metals and Minbos Resources

Assuming the 90 days trading horizon Lykos Metals is expected to under-perform the Minbos Resources. But the stock apears to be less risky and, when comparing its historical volatility, Lykos Metals is 1.09 times less risky than Minbos Resources. The stock trades about -0.09 of its potential returns per unit of risk. The Minbos Resources is currently generating about -0.06 of returns per unit of risk over similar time horizon. If you would invest  5.70  in Minbos Resources on December 21, 2024 and sell it today you would lose (1.10) from holding Minbos Resources or give up 19.3% of portfolio value over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Weak
Accuracy	98.36%
Values	Daily Returns

Lykos Metals  vs.  Minbos Resources

Lykos Metals

Risk-Adjusted Performance

Very Weak

Over the last 90 days Lykos Metals has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of uncertain performance in the last few months, the Stock's forward-looking signals remain comparatively stable which may send shares a bit higher in April 2025. The newest uproar may also be a sign of mid-term up-swing for the firm private investors.

Minbos Resources

Risk-Adjusted Performance

Very Weak

Over the last 90 days Minbos Resources has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of uncertain performance in the last few months, the Stock's fundamental drivers remain comparatively stable which may send shares a bit higher in April 2025. The newest uproar may also be a sign of mid-term up-swing for the firm private investors.

Pair Trading with Lykos Metals and Minbos Resources

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

The idea behind Lykos Metals and Minbos 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 Theme Ratings module to determine theme ratings based on digital equity recommendations. Macroaxis theme ratings are based on combination of fundamental analysis and risk-adjusted market performance.