Correlation Between TMC Industrial and Lohakit Metal

Can any of the company-specific risk be diversified away by investing in both TMC Industrial and Lohakit Metal 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 TMC Industrial and Lohakit Metal into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between TMC Industrial Public and Lohakit Metal Public, you can compare the effects of market volatilities on TMC Industrial and Lohakit Metal 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 TMC Industrial with a short position of Lohakit Metal. Check out your portfolio center. Please also check ongoing floating volatility patterns of TMC Industrial and Lohakit Metal.

Diversification Opportunities for TMC Industrial and Lohakit Metal

0.6

Correlation Coefficient

TMC Industrial  Lohakit Metal

Poor diversification

The 3 months correlation between TMC and Lohakit is 0.6. Overlapping area represents the amount of risk that can be diversified away by holding TMC Industrial Public and Lohakit Metal Public in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Lohakit Metal Public and TMC Industrial 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 TMC Industrial Public are associated (or correlated) with Lohakit Metal. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Lohakit Metal Public has no effect on the direction of TMC Industrial i.e., TMC Industrial and Lohakit Metal go up and down completely randomly.

Pair Corralation between TMC Industrial and Lohakit Metal

Assuming the 90 days trading horizon TMC Industrial Public is expected to under-perform the Lohakit Metal. In addition to that, TMC Industrial is 3.67 times more volatile than Lohakit Metal Public. It trades about -0.01 of its total potential returns per unit of risk. Lohakit Metal Public is currently generating about -0.03 per unit of volatility. If you would invest  439.00  in Lohakit Metal Public on September 16, 2024 and sell it today you would lose (69.00) from holding Lohakit Metal Public or give up 15.72% of portfolio value over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Significant
Accuracy	100.0%
Values	Daily Returns

TMC Industrial Public  vs.  Lohakit Metal Public

TMC Industrial Public

Risk-Adjusted Performance

2 of 100

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in TMC Industrial Public are ranked lower than 2 (%) of all global equities and portfolios over the last 90 days. Despite quite weak fundamental indicators, TMC Industrial may actually be approaching a critical reversion point that can send shares even higher in January 2025.

Lohakit Metal Public

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Lohakit Metal Public has generated negative risk-adjusted returns adding no value to investors with long positions. Despite quite persistent forward-looking signals, Lohakit Metal is not utilizing all of its potentials. The latest stock price mess, may contribute to short-term losses for the institutional investors.

Pair Trading with TMC Industrial and Lohakit Metal

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

The idea behind TMC Industrial Public and Lohakit Metal Public 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 USA ETFs module to find actively traded Exchange Traded Funds (ETF) in USA.