Correlation Between Tartisan Nickel and Lake Resources

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

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

Diversification Opportunities for Tartisan Nickel and Lake Resources

-0.23

Correlation Coefficient

Tartisan Nickel  Lake Resources

Very good diversification

The 3 months correlation between Tartisan and Lake is -0.23. Overlapping area represents the amount of risk that can be diversified away by holding Tartisan Nickel Corp and Lake Resources NL in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Lake Resources NL and Tartisan Nickel 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 Tartisan Nickel Corp are associated (or correlated) with Lake Resources. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Lake Resources NL has no effect on the direction of Tartisan Nickel i.e., Tartisan Nickel and Lake Resources go up and down completely randomly.

Pair Corralation between Tartisan Nickel and Lake Resources

Assuming the 90 days horizon Tartisan Nickel is expected to generate 1.26 times less return on investment than Lake Resources. But when comparing it to its historical volatility, Tartisan Nickel Corp is 2.72 times less risky than Lake Resources. It trades about 0.1 of its potential returns per unit of risk. Lake Resources NL is currently generating about 0.04 of returns per unit of risk over similar time horizon. If you would invest  2.61  in Lake Resources NL on September 15, 2024 and sell it today you would lose (0.08) from holding Lake Resources NL or give up 3.07% of portfolio value over 90 days.

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

Tartisan Nickel Corp  vs.  Lake Resources NL

Tartisan Nickel Corp

Risk-Adjusted Performance

7 of 100

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Tartisan Nickel Corp are ranked lower than 7 (%) of all global equities and portfolios over the last 90 days. Despite nearly fragile basic indicators, Tartisan Nickel reported solid returns over the last few months and may actually be approaching a breakup point.

Lake Resources NL

Risk-Adjusted Performance

3 of 100

Insignificant

Compared to the overall equity markets, risk-adjusted returns on investments in Lake Resources NL are ranked lower than 3 (%) of all global equities and portfolios over the last 90 days. Despite nearly fragile forward-looking signals, Lake Resources reported solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Tartisan Nickel and Lake Resources

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

The idea behind Tartisan Nickel Corp and Lake Resources NL 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 Companies Directory module to evaluate performance of over 100,000 Stocks, Funds, and ETFs against different fundamentals.