Correlation Between Core Lithium and Jourdan Resources
Can any of the company-specific risk be diversified away by investing in both Core Lithium and Jourdan 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 Core Lithium and Jourdan Resources into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Core Lithium and Jourdan Resources, you can compare the effects of market volatilities on Core Lithium and Jourdan 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 Core Lithium with a short position of Jourdan Resources. Check out your portfolio center. Please also check ongoing floating volatility patterns of Core Lithium and Jourdan Resources.
Diversification Opportunities for Core Lithium and Jourdan Resources
0.03 | Correlation Coefficient |
Significant diversification
The 3 months correlation between Core and Jourdan is 0.03. Overlapping area represents the amount of risk that can be diversified away by holding Core Lithium and Jourdan Resources in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Jourdan Resources 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 Jourdan Resources. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Jourdan Resources has no effect on the direction of Core Lithium i.e., Core Lithium and Jourdan Resources go up and down completely randomly.
Pair Corralation between Core Lithium and Jourdan Resources
Assuming the 90 days horizon Core Lithium is expected to under-perform the Jourdan Resources. But the pink sheet apears to be less risky and, when comparing its historical volatility, Core Lithium is 2.03 times less risky than Jourdan Resources. The pink sheet trades about -0.14 of its potential returns per unit of risk. The Jourdan Resources is currently generating about 0.06 of returns per unit of risk over similar time horizon. If you would invest 1.03 in Jourdan Resources on September 1, 2024 and sell it today you would lose (0.03) from holding Jourdan Resources or give up 2.91% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Core Lithium vs. Jourdan Resources
Performance |
| Timeline |
| Core Lithium |
| Jourdan Resources |
Core Lithium and Jourdan Resources Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Core Lithium and Jourdan Resources
The main advantage of trading using opposite Core Lithium and Jourdan Resources positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Core Lithium position performs unexpectedly, Jourdan 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 Jourdan Resources will offset losses from the drop in Jourdan Resources' long position.| Core Lithium vs. ATT Inc | Core Lithium vs. Merck Company | Core Lithium vs. Walt Disney | Core Lithium vs. Caterpillar |
| Jourdan Resources vs. Bravada Gold | Jourdan Resources vs. Golden Goliath Resources | Jourdan Resources vs. Silver Spruce Resources | Jourdan Resources vs. Lake Resources NL |
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 Headlines Timeline module to stay connected to all market stories and filter out noise. Drill down to analyze hype elasticity.
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