Correlation Between Mast Global and Sprott Lithium
Can any of the company-specific risk be diversified away by investing in both Mast Global and Sprott 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 Sprott 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 Sprott Lithium Miners, you can compare the effects of market volatilities on Mast Global and Sprott 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 Sprott Lithium. Check out your portfolio center. Please also check ongoing floating volatility patterns of Mast Global and Sprott Lithium.
Diversification Opportunities for Mast Global and Sprott Lithium
0.81 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between Mast and Sprott is 0.81. Overlapping area represents the amount of risk that can be diversified away by holding Mast Global Battery and Sprott Lithium Miners in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Sprott 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 Sprott Lithium. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Sprott Lithium Miners has no effect on the direction of Mast Global i.e., Mast Global and Sprott Lithium go up and down completely randomly.
Pair Corralation between Mast Global and Sprott Lithium
Allowing for the 90-day total investment horizon Mast Global Battery is expected to generate 0.79 times more return on investment than Sprott Lithium. However, Mast Global Battery is 1.27 times less risky than Sprott Lithium. It trades about -0.1 of its potential returns per unit of risk. Sprott Lithium Miners is currently generating about -0.16 per unit of risk. If you would invest 2,601 in Mast Global Battery on August 27, 2024 and sell it today you would lose (86.00) from holding Mast Global Battery or give up 3.31% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Mast Global Battery vs. Sprott Lithium Miners
Performance |
| Timeline |
| Mast Global Battery |
| Sprott Lithium Miners |
Mast Global and Sprott Lithium Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Mast Global and Sprott Lithium
The main advantage of trading using opposite Mast Global and Sprott Lithium positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Mast Global position performs unexpectedly, Sprott 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 Sprott Lithium will offset losses from the drop in Sprott 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 |
| Sprott Lithium vs. Sprott Energy Transition | Sprott Lithium vs. Sprott Junior Copper | Sprott Lithium vs. Sprott Junior Uranium | Sprott Lithium vs. Sprott Nickel Miners |
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 Portfolio File Import module to quickly import all of your third-party portfolios from your local drive in csv format.
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