Correlation Between Entree Resources and Standard Lithium
Can any of the company-specific risk be diversified away by investing in both Entree Resources and Standard 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 Entree Resources and Standard Lithium into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Entree Resources and Standard Lithium, you can compare the effects of market volatilities on Entree Resources and Standard 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 Entree Resources with a short position of Standard Lithium. Check out your portfolio center. Please also check ongoing floating volatility patterns of Entree Resources and Standard Lithium.
Diversification Opportunities for Entree Resources and Standard Lithium
-0.73 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between Entree and Standard is -0.73. Overlapping area represents the amount of risk that can be diversified away by holding Entree Resources and Standard Lithium in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Standard Lithium and Entree Resources 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 Entree Resources are associated (or correlated) with Standard Lithium. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Standard Lithium has no effect on the direction of Entree Resources i.e., Entree Resources and Standard Lithium go up and down completely randomly.
Pair Corralation between Entree Resources and Standard Lithium
If you would invest 97.00 in Entree Resources on August 31, 2024 and sell it today you would earn a total of 0.00 from holding Entree Resources or generate 0.0% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 4.55% |
| Values | Daily Returns |
Entree Resources vs. Standard Lithium
Performance |
| Timeline |
| Entree Resources |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Very Weak
| Standard Lithium |
Entree Resources and Standard Lithium Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Entree Resources and Standard Lithium
The main advantage of trading using opposite Entree Resources and Standard Lithium positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Entree Resources position performs unexpectedly, Standard 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 Standard Lithium will offset losses from the drop in Standard Lithium's long position.| Entree Resources vs. Sun Summit Minerals | Entree Resources vs. Azarga Metals Corp | Entree Resources vs. Pampa Metals | Entree Resources vs. Progressive Planet Solutions |
| Standard Lithium vs. Lithium Americas Corp | Standard Lithium vs. Piedmont Lithium Ltd | Standard Lithium vs. NioCorp Developments Ltd | Standard Lithium vs. Teck Resources Ltd |
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 Pair Correlation module to compare performance and examine fundamental relationship between any two equity instruments.
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