Correlation Between ATLANTIC LITHIUM and Lion One
Can any of the company-specific risk be diversified away by investing in both ATLANTIC LITHIUM and Lion One 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 ATLANTIC LITHIUM and Lion One into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between ATLANTIC LITHIUM LTD and Lion One Metals, you can compare the effects of market volatilities on ATLANTIC LITHIUM and Lion One 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 ATLANTIC LITHIUM with a short position of Lion One. Check out your portfolio center. Please also check ongoing floating volatility patterns of ATLANTIC LITHIUM and Lion One.
Diversification Opportunities for ATLANTIC LITHIUM and Lion One
0.5 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between ATLANTIC and Lion is 0.5. Overlapping area represents the amount of risk that can be diversified away by holding ATLANTIC LITHIUM LTD and Lion One Metals in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Lion One Metals and ATLANTIC 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 ATLANTIC LITHIUM LTD are associated (or correlated) with Lion One. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Lion One Metals has no effect on the direction of ATLANTIC LITHIUM i.e., ATLANTIC LITHIUM and Lion One go up and down completely randomly.
Pair Corralation between ATLANTIC LITHIUM and Lion One
Assuming the 90 days trading horizon ATLANTIC LITHIUM LTD is expected to generate 1.45 times more return on investment than Lion One. However, ATLANTIC LITHIUM is 1.45 times more volatile than Lion One Metals. It trades about -0.01 of its potential returns per unit of risk. Lion One Metals is currently generating about -0.05 per unit of risk. If you would invest 31.00 in ATLANTIC LITHIUM LTD on September 4, 2024 and sell it today you would lose (18.00) from holding ATLANTIC LITHIUM LTD or give up 58.06% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 99.6% |
| Values | Daily Returns |
ATLANTIC LITHIUM LTD vs. Lion One Metals
Performance |
| Timeline |
| ATLANTIC LITHIUM LTD |
| Lion One Metals |
ATLANTIC LITHIUM and Lion One Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with ATLANTIC LITHIUM and Lion One
The main advantage of trading using opposite ATLANTIC LITHIUM and Lion One positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if ATLANTIC LITHIUM position performs unexpectedly, Lion One 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 Lion One will offset losses from the drop in Lion One's long position.| ATLANTIC LITHIUM vs. Lion One Metals | ATLANTIC LITHIUM vs. LION ONE METALS | ATLANTIC LITHIUM vs. PARKEN Sport Entertainment | ATLANTIC LITHIUM vs. MagnaChip Semiconductor Corp |
| Lion One vs. HEALTHCARE REAL A | Lion One vs. Goosehead Insurance | Lion One vs. INSURANCE AUST GRP | Lion One vs. SBI Insurance Group |
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 Rebalancing module to analyze risk-adjusted returns against different time horizons to find asset-allocation targets.
Other Complementary Tools
| Analyst Advice Analyst recommendations and target price estimates broken down by several categories | |
| Stock Screener Find equities using a custom stock filter or screen asymmetry in trading patterns, price, volume, or investment outlook. | |
| Companies Directory Evaluate performance of over 100,000 Stocks, Funds, and ETFs against different fundamentals | |
| Watchlist Optimization Optimize watchlists to build efficient portfolios or rebalance existing positions based on the mean-variance optimization algorithm | |
| Positions Ratings Determine portfolio positions ratings based on digital equity recommendations. Macroaxis instant position ratings are based on combination of fundamental analysis and risk-adjusted market performance |