Correlation Between Lery Seafood and Fortune Minerals

Can any of the company-specific risk be diversified away by investing in both Lery Seafood and Fortune Minerals 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 Lery Seafood and Fortune Minerals into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between Lery Seafood Group and Fortune Minerals Limited, you can compare the effects of market volatilities on Lery Seafood and Fortune Minerals 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 Lery Seafood with a short position of Fortune Minerals. Check out your portfolio center. Please also check ongoing floating volatility patterns of Lery Seafood and Fortune Minerals.

Diversification Opportunities for Lery Seafood and Fortune Minerals

0.3

Correlation Coefficient

Lery Seafood  Fortune Minerals

Weak diversification

The 3 months correlation between Lery and Fortune is 0.3. Overlapping area represents the amount of risk that can be diversified away by holding Lery Seafood Group and Fortune Minerals Limited in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Fortune Minerals and Lery Seafood 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 Lery Seafood Group are associated (or correlated) with Fortune Minerals. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Fortune Minerals has no effect on the direction of Lery Seafood i.e., Lery Seafood and Fortune Minerals go up and down completely randomly.

Pair Corralation between Lery Seafood and Fortune Minerals

Assuming the 90 days horizon Lery Seafood is expected to generate 1.13 times less return on investment than Fortune Minerals. But when comparing it to its historical volatility, Lery Seafood Group is 1.72 times less risky than Fortune Minerals. It trades about 0.07 of its potential returns per unit of risk. Fortune Minerals Limited is currently generating about 0.05 of returns per unit of risk over similar time horizon. If you would invest  2.55  in Fortune Minerals Limited on October 9, 2024 and sell it today you would lose (0.65) from holding Fortune Minerals Limited or give up 25.49% of portfolio value over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Very Weak
Accuracy	99.6%
Values	Daily Returns

Lery Seafood Group  vs.  Fortune Minerals Limited

Lery Seafood Group

Risk-Adjusted Performance

0 of 100

Very Weak

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

Fortune Minerals

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Fortune Minerals Limited has generated negative risk-adjusted returns adding no value to investors with long positions. Despite nearly unsteady basic indicators, Fortune Minerals may actually be approaching a critical reversion point that can send shares even higher in February 2025.

Pair Trading with Lery Seafood and Fortune Minerals

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

The idea behind Lery Seafood Group and Fortune Minerals Limited 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 Commodity Directory module to find actively traded commodities issued by global exchanges.