Correlation Between CDN Maverick and Noram Lithium
Can any of the company-specific risk be diversified away by investing in both CDN Maverick and Noram 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 CDN Maverick and Noram Lithium 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 Noram Lithium Corp, you can compare the effects of market volatilities on CDN Maverick and Noram 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 CDN Maverick with a short position of Noram Lithium. Check out your portfolio center. Please also check ongoing floating volatility patterns of CDN Maverick and Noram Lithium.
Diversification Opportunities for CDN Maverick and Noram Lithium
-0.54 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between CDN and Noram is -0.54. Overlapping area represents the amount of risk that can be diversified away by holding CDN Maverick Capital and Noram Lithium Corp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Noram Lithium Corp 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 Noram Lithium. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Noram Lithium Corp has no effect on the direction of CDN Maverick i.e., CDN Maverick and Noram Lithium go up and down completely randomly.
Pair Corralation between CDN Maverick and Noram Lithium
Assuming the 90 days horizon CDN Maverick Capital is expected to generate 1.01 times more return on investment than Noram Lithium. However, CDN Maverick is 1.01 times more volatile than Noram Lithium Corp. It trades about -0.04 of its potential returns per unit of risk. Noram Lithium Corp is currently generating about -0.04 per unit of risk. If you would invest 76.00 in CDN Maverick Capital on September 1, 2024 and sell it today you would lose (65.00) from holding CDN Maverick Capital or give up 85.53% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 99.78% |
| Values | Daily Returns |
CDN Maverick Capital vs. Noram Lithium Corp
Performance |
| Timeline |
| CDN Maverick Capital |
| Noram Lithium Corp |
CDN Maverick and Noram Lithium Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with CDN Maverick and Noram Lithium
The main advantage of trading using opposite CDN Maverick and Noram Lithium positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if CDN Maverick position performs unexpectedly, Noram 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 Noram Lithium will offset losses from the drop in Noram Lithium's long position.| CDN Maverick vs. Aurelia Metals Limited | CDN Maverick vs. Artemis Resources | CDN Maverick vs. Ascendant Resources | CDN Maverick vs. Azimut Exploration |
| Noram Lithium vs. ATT Inc | Noram Lithium vs. Merck Company | Noram Lithium vs. Walt Disney | Noram Lithium vs. Caterpillar |
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 Theme Ratings module to determine theme ratings based on digital equity recommendations. Macroaxis theme ratings are based on combination of fundamental analysis and risk-adjusted market performance.
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