Correlation Between First American and Frontier Lithium
Can any of the company-specific risk be diversified away by investing in both First American and Frontier 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 First American and Frontier Lithium into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between First American Silver and Frontier Lithium, you can compare the effects of market volatilities on First American and Frontier 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 First American with a short position of Frontier Lithium. Check out your portfolio center. Please also check ongoing floating volatility patterns of First American and Frontier Lithium.
Diversification Opportunities for First American and Frontier Lithium
0.0 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between First and Frontier is 0.0. Overlapping area represents the amount of risk that can be diversified away by holding First American Silver and Frontier Lithium in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Frontier Lithium and First American 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 First American Silver are associated (or correlated) with Frontier Lithium. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Frontier Lithium has no effect on the direction of First American i.e., First American and Frontier Lithium go up and down completely randomly.
Pair Corralation between First American and Frontier Lithium
If you would invest 0.01 in First American Silver on September 1, 2024 and sell it today you would earn a total of 0.00 from holding First American Silver or generate 0.0% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Flat |
| Strength | Insignificant |
| Accuracy | 95.45% |
| Values | Daily Returns |
First American Silver vs. Frontier Lithium
Performance |
| Timeline |
| First American Silver |
| Frontier Lithium |
First American and Frontier Lithium Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with First American and Frontier Lithium
The main advantage of trading using opposite First American and Frontier Lithium positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if First American position performs unexpectedly, Frontier 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 Frontier Lithium will offset losses from the drop in Frontier Lithium's long position.| First American vs. Australian Vanadium Limited | First American vs. International Lithium Corp | First American vs. Wealth Minerals | First American vs. Decade Resources |
| Frontier Lithium vs. Vision Lithium | Frontier Lithium vs. Critical Elements | Frontier Lithium vs. Cypress Development Corp | Frontier Lithium vs. Core Lithium |
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 Price Ceiling Movement module to calculate and plot Price Ceiling Movement for different equity instruments.
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