Correlation Between American Lithium and Metals Creek
Can any of the company-specific risk be diversified away by investing in both American Lithium and Metals Creek 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 Metals Creek 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 Metals Creek Resources, you can compare the effects of market volatilities on American Lithium and Metals Creek 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 Metals Creek. Check out your portfolio center. Please also check ongoing floating volatility patterns of American Lithium and Metals Creek.
Diversification Opportunities for American Lithium and Metals Creek
0.0 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between American and Metals is 0.0. Overlapping area represents the amount of risk that can be diversified away by holding American Lithium Corp and Metals Creek Resources in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Metals Creek Resources 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 Metals Creek. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Metals Creek Resources has no effect on the direction of American Lithium i.e., American Lithium and Metals Creek go up and down completely randomly.
Pair Corralation between American Lithium and Metals Creek
If you would invest 2.00 in Metals Creek Resources on November 27, 2024 and sell it today you would lose (0.20) from holding Metals Creek Resources or give up 10.0% 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. Metals Creek Resources
Performance |
| Timeline |
| American Lithium Corp |
Risk-Adjusted Performance
Very Weak
Weak | Strong |
| Metals Creek Resources |
American Lithium and Metals Creek Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with American Lithium and Metals Creek
The main advantage of trading using opposite American Lithium and Metals Creek positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if American Lithium position performs unexpectedly, Metals Creek 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 Metals Creek will offset losses from the drop in Metals Creek's long position.| American Lithium vs. Frontier Lithium | American Lithium vs. Cypress Development Corp | American Lithium vs. Rock Tech Lithium |
| Metals Creek vs. Grizzly Discoveries | Metals Creek vs. Greenland Minerals And | Metals Creek vs. First Energy Metals | Metals Creek vs. C3 Metals |
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 Watchlist Optimization module to optimize watchlists to build efficient portfolios or rebalance existing positions based on the mean-variance optimization algorithm.
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