Correlation Between First American and Lithium Ionic
Can any of the company-specific risk be diversified away by investing in both First American and Lithium Ionic 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 Lithium Ionic 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 Lithium Ionic Corp, you can compare the effects of market volatilities on First American and Lithium Ionic 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 Lithium Ionic. Check out your portfolio center. Please also check ongoing floating volatility patterns of First American and Lithium Ionic.
Diversification Opportunities for First American and Lithium Ionic
0.0 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between First and Lithium is 0.0. Overlapping area represents the amount of risk that can be diversified away by holding First American Silver and Lithium Ionic Corp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Lithium Ionic Corp 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 Lithium Ionic. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Lithium Ionic Corp has no effect on the direction of First American i.e., First American and Lithium Ionic go up and down completely randomly.
Pair Corralation between First American and Lithium Ionic
If you would invest 57.00 in Lithium Ionic Corp on September 1, 2024 and sell it today you would earn a total of 10.00 from holding Lithium Ionic Corp or generate 17.54% 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. Lithium Ionic Corp
Performance |
| Timeline |
| First American Silver |
| Lithium Ionic Corp |
First American and Lithium Ionic Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with First American and Lithium Ionic
The main advantage of trading using opposite First American and Lithium Ionic positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if First American position performs unexpectedly, Lithium Ionic 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 Lithium Ionic will offset losses from the drop in Lithium Ionic'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 |
| Lithium Ionic vs. IGO Limited | Lithium Ionic vs. Grid Metals Corp | Lithium Ionic vs. First American Silver | Lithium Ionic vs. Qubec Nickel Corp |
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 Efficient Frontier module to plot and analyze your portfolio and positions against risk-return landscape of the market..
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