Correlation Between Core Lithium and Alpha Copper
Can any of the company-specific risk be diversified away by investing in both Core Lithium and Alpha Copper 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 Core Lithium and Alpha Copper into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Core Lithium and Alpha Copper Corp, you can compare the effects of market volatilities on Core Lithium and Alpha Copper 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 Core Lithium with a short position of Alpha Copper. Check out your portfolio center. Please also check ongoing floating volatility patterns of Core Lithium and Alpha Copper.
Diversification Opportunities for Core Lithium and Alpha Copper
-0.48 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Core and Alpha is -0.48. Overlapping area represents the amount of risk that can be diversified away by holding Core Lithium and Alpha Copper Corp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Alpha Copper Corp and Core 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 Core Lithium are associated (or correlated) with Alpha Copper. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Alpha Copper Corp has no effect on the direction of Core Lithium i.e., Core Lithium and Alpha Copper go up and down completely randomly.
Pair Corralation between Core Lithium and Alpha Copper
Assuming the 90 days horizon Core Lithium is expected to generate 1.92 times less return on investment than Alpha Copper. In addition to that, Core Lithium is 1.05 times more volatile than Alpha Copper Corp. It trades about 0.02 of its total potential returns per unit of risk. Alpha Copper Corp is currently generating about 0.04 per unit of volatility. If you would invest 23.00 in Alpha Copper Corp on October 22, 2024 and sell it today you would lose (6.00) from holding Alpha Copper Corp or give up 26.09% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 99.6% |
| Values | Daily Returns |
Core Lithium vs. Alpha Copper Corp
Performance |
| Timeline |
| Core Lithium |
| Alpha Copper Corp |
Core Lithium and Alpha Copper Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Core Lithium and Alpha Copper
The main advantage of trading using opposite Core Lithium and Alpha Copper positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Core Lithium position performs unexpectedly, Alpha Copper 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 Alpha Copper will offset losses from the drop in Alpha Copper's long position.| Core Lithium vs. Macmahon Holdings Limited | Core Lithium vs. Prime Meridian Resources | Core Lithium vs. International Lithium Corp | Core Lithium vs. Hudson Resources |
| Alpha Copper vs. American Rare Earths | Alpha Copper vs. Scotch Creek Ventures | Alpha Copper vs. Placer Creek Mining | Alpha Copper vs. Ameriwest 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 Fundamental Analysis module to view fundamental data based on most recent published financial statements.
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