Correlation Between Vision Lithium and Sayona Mining
Can any of the company-specific risk be diversified away by investing in both Vision Lithium and Sayona Mining 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 Vision Lithium and Sayona Mining into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Vision Lithium and Sayona Mining Limited, you can compare the effects of market volatilities on Vision Lithium and Sayona Mining 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 Vision Lithium with a short position of Sayona Mining. Check out your portfolio center. Please also check ongoing floating volatility patterns of Vision Lithium and Sayona Mining.
Diversification Opportunities for Vision Lithium and Sayona Mining
0.42 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Vision and Sayona is 0.42. Overlapping area represents the amount of risk that can be diversified away by holding Vision Lithium and Sayona Mining Limited in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Sayona Mining Limited and Vision Lithium 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 Vision Lithium are associated (or correlated) with Sayona Mining. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Sayona Mining Limited has no effect on the direction of Vision Lithium i.e., Vision Lithium and Sayona Mining go up and down completely randomly.
Pair Corralation between Vision Lithium and Sayona Mining
Assuming the 90 days horizon Vision Lithium is expected to generate 2.39 times more return on investment than Sayona Mining. However, Vision Lithium is 2.39 times more volatile than Sayona Mining Limited. It trades about 0.1 of its potential returns per unit of risk. Sayona Mining Limited is currently generating about 0.03 per unit of risk. If you would invest 1.30 in Vision Lithium on November 27, 2024 and sell it today you would earn a total of 0.10 from holding Vision Lithium or generate 7.69% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Vision Lithium vs. Sayona Mining Limited
Performance |
| Timeline |
| Vision Lithium |
| Sayona Mining Limited |
Vision Lithium and Sayona Mining Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Vision Lithium and Sayona Mining
The main advantage of trading using opposite Vision Lithium and Sayona Mining positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Vision Lithium position performs unexpectedly, Sayona Mining 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 Sayona Mining will offset losses from the drop in Sayona Mining's long position.| Vision Lithium vs. Argosy Minerals Limited | Vision Lithium vs. Aurelia Metals Limited | Vision Lithium vs. Critical Elements | Vision Lithium vs. Artemis Resources |
| Sayona Mining vs. Portofino Resources | Sayona Mining vs. Core Lithium | Sayona Mining vs. Global Energy Metals | Sayona Mining vs. Clime Investment Management |
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.
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