Correlation Between Strategic Resources and Lomiko Metals

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

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

Diversification Opportunities for Strategic Resources and Lomiko Metals

0.0

Correlation Coefficient

Strategic Resources  Lomiko Metals

Pay attention - limited upside

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

Pair Corralation between Strategic Resources and Lomiko Metals

If you would invest  8.75  in Lomiko Metals on December 2, 2024 and sell it today you would earn a total of  3.25  from holding Lomiko Metals or generate 37.14% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Flat
Strength	Insignificant
Accuracy	93.85%
Values	Daily Returns

Strategic Resources  vs.  Lomiko Metals

Strategic Resources

Risk-Adjusted Performance

Very Weak

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

Lomiko Metals

Risk-Adjusted Performance

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Lomiko Metals are ranked lower than 8 (%) of all global equities and portfolios over the last 90 days. Despite nearly fragile primary indicators, Lomiko Metals reported solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Strategic Resources and Lomiko Metals

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

The idea behind Strategic Resources and Lomiko Metals 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.

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 Latest Portfolios module to quick portfolio dashboard that showcases your latest portfolios.