Correlation Between Mast Global and IShares Lithium
Can any of the company-specific risk be diversified away by investing in both Mast Global and IShares 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 Mast Global and IShares Lithium into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Mast Global Battery and iShares Lithium Miners, you can compare the effects of market volatilities on Mast Global and IShares 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 Mast Global with a short position of IShares Lithium. Check out your portfolio center. Please also check ongoing floating volatility patterns of Mast Global and IShares Lithium.
Diversification Opportunities for Mast Global and IShares Lithium
0.92 | Correlation Coefficient |
Almost no diversification
The 3 months correlation between Mast and IShares is 0.92. Overlapping area represents the amount of risk that can be diversified away by holding Mast Global Battery and iShares Lithium Miners in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on iShares Lithium Miners and Mast Global 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 Mast Global Battery are associated (or correlated) with IShares Lithium. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of iShares Lithium Miners has no effect on the direction of Mast Global i.e., Mast Global and IShares Lithium go up and down completely randomly.
Pair Corralation between Mast Global and IShares Lithium
Allowing for the 90-day total investment horizon Mast Global Battery is expected to under-perform the IShares Lithium. But the etf apears to be less risky and, when comparing its historical volatility, Mast Global Battery is 1.7 times less risky than IShares Lithium. The etf trades about -0.02 of its potential returns per unit of risk. The iShares Lithium Miners is currently generating about 0.01 of returns per unit of risk over similar time horizon. If you would invest 1,112 in iShares Lithium Miners on August 25, 2024 and sell it today you would lose (1.00) from holding iShares Lithium Miners or give up 0.09% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Mast Global Battery vs. iShares Lithium Miners
Performance |
| Timeline |
| Mast Global Battery |
| iShares Lithium Miners |
Mast Global and IShares Lithium Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Mast Global and IShares Lithium
The main advantage of trading using opposite Mast Global and IShares Lithium positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Mast Global position performs unexpectedly, IShares 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 IShares Lithium will offset losses from the drop in IShares Lithium's long position.| Mast Global vs. iShares Dividend and | Mast Global vs. Martin Currie Sustainable | Mast Global vs. VictoryShares THB Mid | Mast Global vs. AdvisorShares Gerber Kawasaki |
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 Funds Screener module to find actively-traded funds from around the world traded on over 30 global exchanges.
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