Correlation Between Stallion Discoveries and Lomiko Metals
Can any of the company-specific risk be diversified away by investing in both Stallion Discoveries 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 Stallion Discoveries and Lomiko Metals into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Stallion Discoveries Corp and Lomiko Metals, you can compare the effects of market volatilities on Stallion Discoveries 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 Stallion Discoveries with a short position of Lomiko Metals. Check out your portfolio center. Please also check ongoing floating volatility patterns of Stallion Discoveries and Lomiko Metals.
Diversification Opportunities for Stallion Discoveries and Lomiko Metals
-0.21 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Stallion and Lomiko is -0.21. Overlapping area represents the amount of risk that can be diversified away by holding Stallion Discoveries Corp and Lomiko Metals in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Lomiko Metals and Stallion Discoveries 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 Stallion Discoveries Corp 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 Stallion Discoveries i.e., Stallion Discoveries and Lomiko Metals go up and down completely randomly.
Pair Corralation between Stallion Discoveries and Lomiko Metals
Assuming the 90 days horizon Stallion Discoveries is expected to generate 8.39 times less return on investment than Lomiko Metals. In addition to that, Stallion Discoveries is 1.36 times more volatile than Lomiko Metals. It trades about 0.01 of its total potential returns per unit of risk. Lomiko Metals is currently generating about 0.1 per unit of volatility. If you would invest 8.90 in Lomiko Metals on November 22, 2024 and sell it today you would earn a total of 3.10 from holding Lomiko Metals or generate 34.83% return on investment over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Against |
Strength | Insignificant |
Accuracy | 96.67% |
Values | Daily Returns |
Stallion Discoveries Corp vs. Lomiko Metals
Performance |
Timeline |
Stallion Discoveries Corp |
Lomiko Metals |
Stallion Discoveries and Lomiko Metals Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with Stallion Discoveries and Lomiko Metals
The main advantage of trading using opposite Stallion Discoveries and Lomiko Metals positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Stallion Discoveries 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.Stallion Discoveries vs. Aspen Technology | ||
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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 Economic Indicators module to top statistical indicators that provide insights into how an economy is performing.
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