Correlation Between CDN Maverick and Global Li-Ion
Can any of the company-specific risk be diversified away by investing in both CDN Maverick and Global Li-Ion 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 CDN Maverick and Global Li-Ion into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between CDN Maverick Capital and Global Li Ion Graphite, you can compare the effects of market volatilities on CDN Maverick and Global Li-Ion 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 CDN Maverick with a short position of Global Li-Ion. Check out your portfolio center. Please also check ongoing floating volatility patterns of CDN Maverick and Global Li-Ion.
Diversification Opportunities for CDN Maverick and Global Li-Ion
0.47 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between CDN and Global is 0.47. Overlapping area represents the amount of risk that can be diversified away by holding CDN Maverick Capital and Global Li Ion Graphite in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Global Li Ion and CDN Maverick 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 CDN Maverick Capital are associated (or correlated) with Global Li-Ion. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Global Li Ion has no effect on the direction of CDN Maverick i.e., CDN Maverick and Global Li-Ion go up and down completely randomly.
Pair Corralation between CDN Maverick and Global Li-Ion
Assuming the 90 days horizon CDN Maverick is expected to generate 1.63 times less return on investment than Global Li-Ion. But when comparing it to its historical volatility, CDN Maverick Capital is 1.05 times less risky than Global Li-Ion. It trades about 0.16 of its potential returns per unit of risk. Global Li Ion Graphite is currently generating about 0.25 of returns per unit of risk over similar time horizon. If you would invest 1.24 in Global Li Ion Graphite on November 3, 2024 and sell it today you would earn a total of 1.45 from holding Global Li Ion Graphite or generate 116.94% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
CDN Maverick Capital vs. Global Li Ion Graphite
Performance |
| Timeline |
| CDN Maverick Capital |
| Global Li Ion |
CDN Maverick and Global Li-Ion Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with CDN Maverick and Global Li-Ion
The main advantage of trading using opposite CDN Maverick and Global Li-Ion positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if CDN Maverick position performs unexpectedly, Global Li-Ion 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 Global Li-Ion will offset losses from the drop in Global Li-Ion's long position.| CDN Maverick vs. Aurelia Metals Limited | CDN Maverick vs. Artemis Resources | CDN Maverick vs. Ascendant Resources | CDN Maverick vs. Azimut Exploration |
| Global Li-Ion vs. Nova Lithium Corp | Global Li-Ion vs. Qubec Nickel Corp | Global Li-Ion vs. SPC Nickel Corp | Global Li-Ion vs. CDN Maverick Capital |
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 Bond Analysis module to evaluate and analyze corporate bonds as a potential investment for your portfolios..
Other Complementary Tools
| Premium Stories Follow Macroaxis premium stories from verified contributors across different equity types, categories and coverage scope | |
| Portfolio Comparator Compare the composition, asset allocations and performance of any two portfolios in your account | |
| Equity Search Search for actively traded equities including funds and ETFs from over 30 global markets | |
| Commodity Directory Find actively traded commodities issued by global exchanges | |
| Performance Analysis Check effects of mean-variance optimization against your current asset allocation |