Correlation Between Lifezone Metals and TMC The

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

By analyzing existing cross correlation between Lifezone Metals Limited and TMC the metals, you can compare the effects of market volatilities on Lifezone Metals and TMC The 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 Lifezone Metals with a short position of TMC The. Check out your portfolio center. Please also check ongoing floating volatility patterns of Lifezone Metals and TMC The.

Diversification Opportunities for Lifezone Metals and TMC The

-0.76

Correlation Coefficient

Lifezone Metals  TMC The

Pay attention - limited upside

The 3 months correlation between Lifezone and TMC is -0.76. Overlapping area represents the amount of risk that can be diversified away by holding Lifezone Metals Limited and TMC the metals in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on TMC the metals and Lifezone 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 Lifezone Metals Limited are associated (or correlated) with TMC The. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of TMC the metals has no effect on the direction of Lifezone Metals i.e., Lifezone Metals and TMC The go up and down completely randomly.

Pair Corralation between Lifezone Metals and TMC The

Considering the 90-day investment horizon Lifezone Metals Limited is expected to under-perform the TMC The. But the stock apears to be less risky and, when comparing its historical volatility, Lifezone Metals Limited is 3.78 times less risky than TMC The. The stock trades about -0.31 of its potential returns per unit of risk. The TMC the metals is currently generating about 0.24 of returns per unit of risk over similar time horizon. If you would invest  9.50  in TMC the metals on January 14, 2025 and sell it today you would earn a total of  34.50  from holding TMC the metals or generate 363.16% return on investment over 90 days.

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

Lifezone Metals Limited  vs.  TMC the metals

Lifezone Metals

Risk-Adjusted Performance

Very Weak

Over the last 90 days Lifezone Metals Limited has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of uncertain performance in the last few months, the Stock's basic indicators remain very healthy which may send shares a bit higher in May 2025. The recent disarray may also be a sign of long period up-swing for the firm investors.

TMC the metals

Risk-Adjusted Performance

Solid

Compared to the overall equity markets, risk-adjusted returns on investments in TMC the metals are ranked lower than 19 (%) of all global equities and portfolios over the last 90 days. In spite of fairly abnormal basic indicators, TMC The showed solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Lifezone Metals and TMC The

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

The idea behind Lifezone Metals Limited and TMC the metals 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.

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 Latest Portfolios module to quick portfolio dashboard that showcases your latest portfolios.