Correlation Between Ameriwest Lithium and Saint Jean
Can any of the company-specific risk be diversified away by investing in both Ameriwest Lithium and Saint Jean 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 Ameriwest Lithium and Saint Jean into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Ameriwest Lithium and Saint Jean Carbon, you can compare the effects of market volatilities on Ameriwest Lithium and Saint Jean 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 Ameriwest Lithium with a short position of Saint Jean. Check out your portfolio center. Please also check ongoing floating volatility patterns of Ameriwest Lithium and Saint Jean.
Diversification Opportunities for Ameriwest Lithium and Saint Jean
0.25 | Correlation Coefficient |
Modest diversification
The 3 months correlation between Ameriwest and Saint is 0.25. Overlapping area represents the amount of risk that can be diversified away by holding Ameriwest Lithium and Saint Jean Carbon in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Saint Jean Carbon and Ameriwest 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 Ameriwest Lithium are associated (or correlated) with Saint Jean. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Saint Jean Carbon has no effect on the direction of Ameriwest Lithium i.e., Ameriwest Lithium and Saint Jean go up and down completely randomly.
Pair Corralation between Ameriwest Lithium and Saint Jean
Assuming the 90 days horizon Ameriwest Lithium is expected to under-perform the Saint Jean. But the pink sheet apears to be less risky and, when comparing its historical volatility, Ameriwest Lithium is 3.4 times less risky than Saint Jean. The pink sheet trades about -0.14 of its potential returns per unit of risk. The Saint Jean Carbon is currently generating about 0.12 of returns per unit of risk over similar time horizon. If you would invest 1.55 in Saint Jean Carbon on August 31, 2024 and sell it today you would earn a total of 0.24 from holding Saint Jean Carbon or generate 15.48% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Ameriwest Lithium vs. Saint Jean Carbon
Performance |
| Timeline |
| Ameriwest Lithium |
| Saint Jean Carbon |
Ameriwest Lithium and Saint Jean Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Ameriwest Lithium and Saint Jean
The main advantage of trading using opposite Ameriwest Lithium and Saint Jean positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Ameriwest Lithium position performs unexpectedly, Saint Jean 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 Saint Jean will offset losses from the drop in Saint Jean's long position.| Ameriwest Lithium vs. Starr Peak Exploration | Ameriwest Lithium vs. American Lithium Corp | Ameriwest Lithium vs. Global Helium Corp | Ameriwest Lithium vs. Alpha Lithium |
| Saint Jean vs. ZincX Resources Corp | Saint Jean vs. Mundoro Capital | Saint Jean vs. Strategic Resources | Saint Jean vs. Norra Metals Corp |
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 Portfolio Suggestion module to get suggestions outside of your existing asset allocation including your own model portfolios.
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