Correlation Between CDN Maverick and Nova Lithium
Can any of the company-specific risk be diversified away by investing in both CDN Maverick and Nova 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 Nova 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 Nova Lithium Corp, you can compare the effects of market volatilities on CDN Maverick and Nova 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 Nova Lithium. Check out your portfolio center. Please also check ongoing floating volatility patterns of CDN Maverick and Nova Lithium.
Diversification Opportunities for CDN Maverick and Nova Lithium
-0.02 | Correlation Coefficient |
Good diversification
The 3 months correlation between CDN and Nova is -0.02. Overlapping area represents the amount of risk that can be diversified away by holding CDN Maverick Capital and Nova Lithium Corp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Nova 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 Nova Lithium. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Nova Lithium Corp has no effect on the direction of CDN Maverick i.e., CDN Maverick and Nova Lithium go up and down completely randomly.
Pair Corralation between CDN Maverick and Nova Lithium
Assuming the 90 days horizon CDN Maverick Capital is expected to generate 1.57 times more return on investment than Nova Lithium. However, CDN Maverick is 1.57 times more volatile than Nova Lithium Corp. It trades about 0.1 of its potential returns per unit of risk. Nova Lithium Corp is currently generating about -0.02 per unit of risk. If you would invest 11.00 in CDN Maverick Capital on November 27, 2024 and sell it today you would earn a total of 6.00 from holding CDN Maverick Capital or generate 54.55% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 93.55% |
| Values | Daily Returns |
CDN Maverick Capital vs. Nova Lithium Corp
Performance |
| Timeline |
| CDN Maverick Capital |
| Nova Lithium Corp |
CDN Maverick and Nova Lithium Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with CDN Maverick and Nova Lithium
The main advantage of trading using opposite CDN Maverick and Nova Lithium positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if CDN Maverick position performs unexpectedly, Nova 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 Nova Lithium will offset losses from the drop in Nova 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 |
| Nova Lithium vs. Sandstorm Gold Ltd | Nova Lithium vs. Penn National Gaming | Nova Lithium vs. Titan America SA | Nova Lithium vs. Avarone Metals |
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 Center module to all portfolio management and optimization tools to improve performance of your portfolios.
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