Correlation Between Champion Iron and LithiumBank Resources
Can any of the company-specific risk be diversified away by investing in both Champion Iron 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 Champion Iron and LithiumBank Resources into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Champion Iron and LithiumBank Resources Corp, you can compare the effects of market volatilities on Champion Iron 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 Champion Iron with a short position of LithiumBank Resources. Check out your portfolio center. Please also check ongoing floating volatility patterns of Champion Iron and LithiumBank Resources.
Diversification Opportunities for Champion Iron and LithiumBank Resources
0.36 | Correlation Coefficient |
Weak diversification
The 3 months correlation between Champion and LithiumBank is 0.36. Overlapping area represents the amount of risk that can be diversified away by holding Champion Iron and LithiumBank Resources Corp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on LithiumBank Resources and Champion Iron 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 Champion Iron 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 Champion Iron i.e., Champion Iron and LithiumBank Resources go up and down completely randomly.
Pair Corralation between Champion Iron and LithiumBank Resources
Assuming the 90 days trading horizon Champion Iron is expected to generate 0.59 times more return on investment than LithiumBank Resources. However, Champion Iron is 1.7 times less risky than LithiumBank Resources. It trades about 0.02 of its potential returns per unit of risk. LithiumBank Resources Corp is currently generating about -0.08 per unit of risk. If you would invest 508.00 in Champion Iron on September 12, 2024 and sell it today you would earn a total of 49.00 from holding Champion Iron or generate 9.65% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Champion Iron vs. LithiumBank Resources Corp
Performance |
| Timeline |
| Champion Iron |
| LithiumBank Resources |
Champion Iron and LithiumBank Resources Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Champion Iron and LithiumBank Resources
The main advantage of trading using opposite Champion Iron and LithiumBank Resources positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Champion Iron 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.| Champion Iron vs. Ressources Minieres Radisson | Champion Iron vs. Galantas Gold Corp | Champion Iron vs. Red Pine Exploration | Champion Iron vs. Kore Mining |
| LithiumBank Resources vs. Ressources Minieres Radisson | LithiumBank Resources vs. Galantas Gold Corp | LithiumBank Resources vs. Red Pine Exploration | LithiumBank Resources vs. Kore Mining |
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 Money Managers module to screen money managers from public funds and ETFs managed around the world.
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