Correlation Between American Lithium and Green Technology
Can any of the company-specific risk be diversified away by investing in both American Lithium and Green Technology 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 American Lithium and Green Technology into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between American Lithium Corp and Green Technology Metals, you can compare the effects of market volatilities on American Lithium and Green Technology 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 American Lithium with a short position of Green Technology. Check out your portfolio center. Please also check ongoing floating volatility patterns of American Lithium and Green Technology.
Diversification Opportunities for American Lithium and Green Technology
0.0 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between American and Green is 0.0. Overlapping area represents the amount of risk that can be diversified away by holding American Lithium Corp and Green Technology Metals in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Green Technology Metals and American 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 American Lithium Corp are associated (or correlated) with Green Technology. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Green Technology Metals has no effect on the direction of American Lithium i.e., American Lithium and Green Technology go up and down completely randomly.
Pair Corralation between American Lithium and Green Technology
If you would invest 42.00 in Green Technology Metals on November 27, 2024 and sell it today you would lose (34.32) from holding Green Technology Metals or give up 81.71% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Flat |
| Strength | Insignificant |
| Accuracy | 0.0% |
| Values | Daily Returns |
American Lithium Corp vs. Green Technology Metals
Performance |
| Timeline |
| American Lithium Corp |
Risk-Adjusted Performance
Very Weak
Weak | Strong |
| Green Technology Metals |
American Lithium and Green Technology Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with American Lithium and Green Technology
The main advantage of trading using opposite American Lithium and Green Technology positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if American Lithium position performs unexpectedly, Green Technology 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 Green Technology will offset losses from the drop in Green Technology's long position.| American Lithium vs. Frontier Lithium | American Lithium vs. Cypress Development Corp | American Lithium vs. Rock Tech Lithium |
| Green Technology vs. Lake Resources NL | Green Technology vs. Arizona Lithium Limited | Green Technology vs. Sayona Mining Limited | Green Technology vs. Argosy Minerals Limited |
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 Fundamental Analysis module to view fundamental data based on most recent published financial statements.
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