Correlation Between Arizona Lithium and Sayona Mining
Can any of the company-specific risk be diversified away by investing in both Arizona Lithium and Sayona Mining 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 Arizona Lithium and Sayona Mining into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Arizona Lithium Limited and Sayona Mining Limited, you can compare the effects of market volatilities on Arizona Lithium and Sayona Mining 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 Arizona Lithium with a short position of Sayona Mining. Check out your portfolio center. Please also check ongoing floating volatility patterns of Arizona Lithium and Sayona Mining.
Diversification Opportunities for Arizona Lithium and Sayona Mining
-0.08 | Correlation Coefficient |
Good diversification
The 3 months correlation between Arizona and Sayona is -0.08. Overlapping area represents the amount of risk that can be diversified away by holding Arizona Lithium Limited and Sayona Mining Limited in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Sayona Mining Limited and Arizona 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 Arizona Lithium Limited are associated (or correlated) with Sayona Mining. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Sayona Mining Limited has no effect on the direction of Arizona Lithium i.e., Arizona Lithium and Sayona Mining go up and down completely randomly.
Pair Corralation between Arizona Lithium and Sayona Mining
Assuming the 90 days horizon Arizona Lithium Limited is expected to generate 1.76 times more return on investment than Sayona Mining. However, Arizona Lithium is 1.76 times more volatile than Sayona Mining Limited. It trades about 0.1 of its potential returns per unit of risk. Sayona Mining Limited is currently generating about 0.06 per unit of risk. If you would invest 1.00 in Arizona Lithium Limited on August 29, 2024 and sell it today you would earn a total of 0.33 from holding Arizona Lithium Limited or generate 33.0% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Arizona Lithium Limited vs. Sayona Mining Limited
Performance |
| Timeline |
| Arizona Lithium |
| Sayona Mining Limited |
Arizona Lithium and Sayona Mining Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Arizona Lithium and Sayona Mining
The main advantage of trading using opposite Arizona Lithium and Sayona Mining positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Arizona Lithium position performs unexpectedly, Sayona Mining 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 Sayona Mining will offset losses from the drop in Sayona Mining's long position.| Arizona Lithium vs. Bushveld Minerals Limited | Arizona Lithium vs. Aurelia Metals Limited | Arizona Lithium vs. Artemis Resources | Arizona Lithium vs. Ascendant Resources |
| Sayona Mining vs. Portofino Resources | Sayona Mining vs. Core Lithium | Sayona Mining vs. Global Energy Metals | Sayona Mining vs. Clime Investment Management |
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 Commodity Directory module to find actively traded commodities issued by global exchanges.
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