Correlation Between Atlas Lithium and Sibanye Gold
Can any of the company-specific risk be diversified away by investing in both Atlas Lithium and Sibanye Gold 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 Atlas Lithium and Sibanye Gold into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Atlas Lithium and Sibanye Gold Ltd, you can compare the effects of market volatilities on Atlas Lithium and Sibanye Gold 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 Atlas Lithium with a short position of Sibanye Gold. Check out your portfolio center. Please also check ongoing floating volatility patterns of Atlas Lithium and Sibanye Gold.
Diversification Opportunities for Atlas Lithium and Sibanye Gold
0.74 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Atlas and Sibanye is 0.74. Overlapping area represents the amount of risk that can be diversified away by holding Atlas Lithium and Sibanye Gold Ltd in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Sibanye Gold and Atlas 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 Atlas Lithium are associated (or correlated) with Sibanye Gold. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Sibanye Gold has no effect on the direction of Atlas Lithium i.e., Atlas Lithium and Sibanye Gold go up and down completely randomly.
Pair Corralation between Atlas Lithium and Sibanye Gold
Given the investment horizon of 90 days Atlas Lithium is expected to under-perform the Sibanye Gold. In addition to that, Atlas Lithium is 1.39 times more volatile than Sibanye Gold Ltd. It trades about -0.08 of its total potential returns per unit of risk. Sibanye Gold Ltd is currently generating about 0.0 per unit of volatility. If you would invest 477.00 in Sibanye Gold Ltd on November 9, 2024 and sell it today you would lose (77.00) from holding Sibanye Gold Ltd or give up 16.14% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Atlas Lithium vs. Sibanye Gold Ltd
Performance |
| Timeline |
| Atlas Lithium |
| Sibanye Gold |
Atlas Lithium and Sibanye Gold Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Atlas Lithium and Sibanye Gold
The main advantage of trading using opposite Atlas Lithium and Sibanye Gold positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Atlas Lithium position performs unexpectedly, Sibanye Gold 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 Sibanye Gold will offset losses from the drop in Sibanye Gold's long position.| Atlas Lithium vs. SilverCrest Metals | Atlas Lithium vs. New Pacific Metals | Atlas Lithium vs. Endeavour Silver Corp | Atlas Lithium vs. McEwen Mining |
| Sibanye Gold vs. AngloGold Ashanti plc | Sibanye Gold vs. Harmony Gold Mining | Sibanye Gold vs. Eldorado Gold Corp | Sibanye Gold vs. Kinross Gold |
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 Money Flow Index module to determine momentum by analyzing Money Flow Index and other technical indicators.
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