Correlation Between Canaf Investments and LithiumBank Resources
Can any of the company-specific risk be diversified away by investing in both Canaf Investments and LithiumBank Resources 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 Canaf Investments and LithiumBank Resources into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Canaf Investments and LithiumBank Resources Corp, you can compare the effects of market volatilities on Canaf Investments and LithiumBank Resources 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 Canaf Investments with a short position of LithiumBank Resources. Check out your portfolio center. Please also check ongoing floating volatility patterns of Canaf Investments and LithiumBank Resources.
Diversification Opportunities for Canaf Investments and LithiumBank Resources
-0.62 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Canaf and LithiumBank is -0.62. Overlapping area represents the amount of risk that can be diversified away by holding Canaf Investments and LithiumBank Resources Corp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on LithiumBank Resources and Canaf Investments 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 Canaf Investments are associated (or correlated) with LithiumBank Resources. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of LithiumBank Resources has no effect on the direction of Canaf Investments i.e., Canaf Investments and LithiumBank Resources go up and down completely randomly.
Pair Corralation between Canaf Investments and LithiumBank Resources
Assuming the 90 days horizon Canaf Investments is expected to generate 0.88 times more return on investment than LithiumBank Resources. However, Canaf Investments is 1.14 times less risky than LithiumBank Resources. It trades about 0.08 of its potential returns per unit of risk. LithiumBank Resources Corp is currently generating about -0.1 per unit of risk. If you would invest 16.00 in Canaf Investments on September 3, 2024 and sell it today you would earn a total of 13.00 from holding Canaf Investments or generate 81.25% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Canaf Investments vs. LithiumBank Resources Corp
Performance |
| Timeline |
| Canaf Investments |
| LithiumBank Resources |
Canaf Investments and LithiumBank Resources Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Canaf Investments and LithiumBank Resources
The main advantage of trading using opposite Canaf Investments and LithiumBank Resources positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Canaf Investments position performs unexpectedly, LithiumBank Resources 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 LithiumBank Resources will offset losses from the drop in LithiumBank Resources' long position.| Canaf Investments vs. Ocumetics Technology Corp | Canaf Investments vs. Constellation Software | Canaf Investments vs. Datable Technology Corp | Canaf Investments vs. Profound Medical Corp |
| LithiumBank Resources vs. Algoma Steel Group | LithiumBank Resources vs. Champion Iron | LithiumBank Resources vs. International Zeolite Corp | LithiumBank Resources vs. European Residential Real |
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 Positions Ratings module to 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.
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