Correlation Between Anson Resources and American Lithium
Can any of the company-specific risk be diversified away by investing in both Anson Resources and American Lithium 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 Anson Resources and American Lithium into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Anson Resources Limited and American Lithium Corp, you can compare the effects of market volatilities on Anson Resources and American Lithium 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 Anson Resources with a short position of American Lithium. Check out your portfolio center. Please also check ongoing floating volatility patterns of Anson Resources and American Lithium.
Diversification Opportunities for Anson Resources and American Lithium
0.66 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Anson and American is 0.66. Overlapping area represents the amount of risk that can be diversified away by holding Anson Resources Limited and American Lithium Corp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on American Lithium Corp and Anson Resources 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 Anson Resources Limited are associated (or correlated) with American Lithium. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of American Lithium Corp has no effect on the direction of Anson Resources i.e., Anson Resources and American Lithium go up and down completely randomly.
Pair Corralation between Anson Resources and American Lithium
Assuming the 90 days horizon Anson Resources Limited is expected to generate 0.54 times more return on investment than American Lithium. However, Anson Resources Limited is 1.84 times less risky than American Lithium. It trades about 0.0 of its potential returns per unit of risk. American Lithium Corp is currently generating about 0.0 per unit of risk. If you would invest 15.00 in Anson Resources Limited on September 3, 2024 and sell it today you would lose (10.89) from holding Anson Resources Limited or give up 72.6% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 22.27% |
| Values | Daily Returns |
Anson Resources Limited vs. American Lithium Corp
Performance |
| Timeline |
| Anson Resources |
| American Lithium Corp |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Very Weak
Anson Resources and American Lithium Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Anson Resources and American Lithium
The main advantage of trading using opposite Anson Resources and American Lithium positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Anson Resources position performs unexpectedly, American Lithium 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 American Lithium will offset losses from the drop in American Lithium's long position.| Anson Resources vs. Qubec Nickel Corp | Anson Resources vs. IGO Limited | Anson Resources vs. Avarone Metals | Anson Resources vs. Adriatic Metals PLC |
| American Lithium vs. American Lithium Corp | American Lithium vs. Frontier Lithium | American Lithium vs. Cypress Development Corp | American Lithium vs. Rock Tech Lithium |
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 FinTech Suite module to use AI to screen and filter profitable investment opportunities.
Other Complementary Tools
| Funds Screener Find actively-traded funds from around the world traded on over 30 global exchanges | |
| Technical Analysis Check basic technical indicators and analysis based on most latest market data | |
| AI Portfolio Architect Use AI to generate optimal portfolios and find profitable investment opportunities | |
| Transaction History View history of all your transactions and understand their impact on performance | |
| Portfolio Holdings Check your current holdings and cash postion to detemine if your portfolio needs rebalancing |