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
0.67 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Mast and IShares is 0.67. 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 generate 0.73 times more return on investment than IShares Lithium. However, Mast Global Battery is 1.37 times less risky than IShares Lithium. It trades about 0.12 of its potential returns per unit of risk. iShares Lithium Miners is currently generating about -0.04 per unit of risk. If you would invest 2,360 in Mast Global Battery on November 9, 2024 and sell it today you would earn a total of 65.00 from holding Mast Global Battery or generate 2.75% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| 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. ZEGA Buy and | Mast Global vs. Hartford Total Return | Mast Global vs. FT Vest Equity | Mast Global vs. Zillow Group Class |
| IShares Lithium vs. Direxion Daily Gold | IShares Lithium vs. SPDR SP North | IShares Lithium vs. Xtrackers RREEF Global | IShares Lithium vs. Direxion Daily Gold |
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 Global Correlations module to find global opportunities by holding instruments from different markets.
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