Correlation Between Argosy Minerals and Lithium Energi
Can any of the company-specific risk be diversified away by investing in both Argosy Minerals and Lithium Energi 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 Argosy Minerals and Lithium Energi into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Argosy Minerals Limited and Lithium Energi Exploration, you can compare the effects of market volatilities on Argosy Minerals and Lithium Energi 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 Argosy Minerals with a short position of Lithium Energi. Check out your portfolio center. Please also check ongoing floating volatility patterns of Argosy Minerals and Lithium Energi.
Diversification Opportunities for Argosy Minerals and Lithium Energi
0.59 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Argosy and Lithium is 0.59. Overlapping area represents the amount of risk that can be diversified away by holding Argosy Minerals Limited and Lithium Energi Exploration in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Lithium Energi Explo and Argosy Minerals 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 Argosy Minerals Limited are associated (or correlated) with Lithium Energi. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Lithium Energi Explo has no effect on the direction of Argosy Minerals i.e., Argosy Minerals and Lithium Energi go up and down completely randomly.
Pair Corralation between Argosy Minerals and Lithium Energi
Assuming the 90 days horizon Argosy Minerals Limited is expected to under-perform the Lithium Energi. But the pink sheet apears to be less risky and, when comparing its historical volatility, Argosy Minerals Limited is 4.14 times less risky than Lithium Energi. The pink sheet trades about -0.06 of its potential returns per unit of risk. The Lithium Energi Exploration is currently generating about 0.06 of returns per unit of risk over similar time horizon. If you would invest 14.00 in Lithium Energi Exploration on September 2, 2024 and sell it today you would lose (11.44) from holding Lithium Energi Exploration or give up 81.71% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 99.73% |
| Values | Daily Returns |
Argosy Minerals Limited vs. Lithium Energi Exploration
Performance |
| Timeline |
| Argosy Minerals |
| Lithium Energi Explo |
Argosy Minerals and Lithium Energi Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Argosy Minerals and Lithium Energi
The main advantage of trading using opposite Argosy Minerals and Lithium Energi positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Argosy Minerals position performs unexpectedly, Lithium Energi 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 Lithium Energi will offset losses from the drop in Lithium Energi's long position.| Argosy Minerals vs. ATT Inc | Argosy Minerals vs. Merck Company | Argosy Minerals vs. Walt Disney | Argosy Minerals vs. Caterpillar |
| Lithium Energi vs. Savannah Resources Plc | Lithium Energi vs. Critical Elements | Lithium Energi vs. International Battery Metals | Lithium Energi vs. Talga Group |
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 Crypto Correlations module to use cryptocurrency correlation module to diversify your cryptocurrency portfolio across multiple coins.
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