Correlation Between Power Metals and Lara Exploration
Can any of the company-specific risk be diversified away by investing in both Power Metals and Lara Exploration 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 Power Metals and Lara Exploration into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Power Metals Corp and Lara Exploration, you can compare the effects of market volatilities on Power Metals and Lara Exploration 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 Power Metals with a short position of Lara Exploration. Check out your portfolio center. Please also check ongoing floating volatility patterns of Power Metals and Lara Exploration.
Diversification Opportunities for Power Metals and Lara Exploration
0.05 | Correlation Coefficient |
Significant diversification
The 3 months correlation between Power and Lara is 0.05. Overlapping area represents the amount of risk that can be diversified away by holding Power Metals Corp and Lara Exploration in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Lara Exploration and Power Metals 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 Power Metals Corp are associated (or correlated) with Lara Exploration. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Lara Exploration has no effect on the direction of Power Metals i.e., Power Metals and Lara Exploration go up and down completely randomly.
Pair Corralation between Power Metals and Lara Exploration
Assuming the 90 days horizon Power Metals Corp is expected to generate 0.92 times more return on investment than Lara Exploration. However, Power Metals Corp is 1.08 times less risky than Lara Exploration. It trades about 0.07 of its potential returns per unit of risk. Lara Exploration is currently generating about 0.04 per unit of risk. If you would invest 48.00 in Power Metals Corp on September 2, 2025 and sell it today you would earn a total of 8.00 from holding Power Metals Corp or generate 16.67% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Power Metals Corp vs. Lara Exploration
Performance |
| Timeline |
| Power Metals Corp |
| Lara Exploration |
Power Metals and Lara Exploration Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Power Metals and Lara Exploration
The main advantage of trading using opposite Power Metals and Lara Exploration positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Power Metals position performs unexpectedly, Lara Exploration 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 Lara Exploration will offset losses from the drop in Lara Exploration's long position.| Power Metals vs. United Rentals | Power Metals vs. Academy Sports Outdoors | Power Metals vs. Canlan Ice Sports | Power Metals vs. Signature Leisure |
| Lara Exploration vs. Canlan Ice Sports | Lara Exploration vs. SIGNA Sports United | Lara Exploration vs. Alliance Sports Group | Lara Exploration vs. Zhibao Technology Class |
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 Competition Analyzer module to analyze and compare many basic indicators for a group of related or unrelated entities.
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