Correlation Between Arizona Lithium and Americas Silver
Can any of the company-specific risk be diversified away by investing in both Arizona Lithium and Americas Silver 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 Americas Silver 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 Americas Silver Corp, you can compare the effects of market volatilities on Arizona Lithium and Americas Silver 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 Americas Silver. Check out your portfolio center. Please also check ongoing floating volatility patterns of Arizona Lithium and Americas Silver.
Diversification Opportunities for Arizona Lithium and Americas Silver
-0.01 | Correlation Coefficient |
Good diversification
The 3 months correlation between Arizona and Americas is -0.01. Overlapping area represents the amount of risk that can be diversified away by holding Arizona Lithium Limited and Americas Silver Corp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Americas Silver Corp 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 Americas Silver. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Americas Silver Corp has no effect on the direction of Arizona Lithium i.e., Arizona Lithium and Americas Silver go up and down completely randomly.
Pair Corralation between Arizona Lithium and Americas Silver
Assuming the 90 days horizon Arizona Lithium Limited is expected to under-perform the Americas Silver. In addition to that, Arizona Lithium is 2.21 times more volatile than Americas Silver Corp. It trades about -0.01 of its total potential returns per unit of risk. Americas Silver Corp is currently generating about 0.01 per unit of volatility. If you would invest 42.00 in Americas Silver Corp on September 3, 2024 and sell it today you would lose (1.00) from holding Americas Silver Corp or give up 2.38% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 95.24% |
| Values | Daily Returns |
Arizona Lithium Limited vs. Americas Silver Corp
Performance |
| Timeline |
| Arizona Lithium |
| Americas Silver Corp |
Arizona Lithium and Americas Silver Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Arizona Lithium and Americas Silver
The main advantage of trading using opposite Arizona Lithium and Americas Silver positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Arizona Lithium position performs unexpectedly, Americas Silver 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 Americas Silver will offset losses from the drop in Americas Silver's long position.| Arizona Lithium vs. Qubec Nickel Corp | Arizona Lithium vs. IGO Limited | Arizona Lithium vs. Anson Resources Limited | Arizona Lithium vs. Avarone Metals |
| Americas Silver vs. Arizona Lithium Limited | Americas Silver vs. SPACE | Americas Silver vs. Bayview Acquisition Corp | Americas Silver vs. T Rowe Price |
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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