Correlation Between Geodrill and LithiumBank Resources
Can any of the company-specific risk be diversified away by investing in both Geodrill and LithiumBank 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 Geodrill and LithiumBank Resources into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Geodrill Limited and LithiumBank Resources Corp, you can compare the effects of market volatilities on Geodrill and LithiumBank 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 Geodrill with a short position of LithiumBank Resources. Check out your portfolio center. Please also check ongoing floating volatility patterns of Geodrill and LithiumBank Resources.
Diversification Opportunities for Geodrill and LithiumBank Resources
-0.71 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between Geodrill and LithiumBank is -0.71. Overlapping area represents the amount of risk that can be diversified away by holding Geodrill Limited and LithiumBank Resources Corp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on LithiumBank Resources and Geodrill 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 Geodrill Limited are associated (or correlated) with LithiumBank Resources. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of LithiumBank Resources has no effect on the direction of Geodrill i.e., Geodrill and LithiumBank Resources go up and down completely randomly.
Pair Corralation between Geodrill and LithiumBank Resources
Assuming the 90 days trading horizon Geodrill Limited is expected to generate 0.47 times more return on investment than LithiumBank Resources. However, Geodrill Limited is 2.13 times less risky than LithiumBank Resources. It trades about 0.19 of its potential returns per unit of risk. LithiumBank Resources Corp is currently generating about 0.02 per unit of risk. If you would invest 277.00 in Geodrill Limited on September 13, 2024 and sell it today you would earn a total of 30.00 from holding Geodrill Limited or generate 10.83% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Geodrill Limited vs. LithiumBank Resources Corp
Performance |
| Timeline |
| Geodrill Limited |
| LithiumBank Resources |
Geodrill and LithiumBank Resources Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Geodrill and LithiumBank Resources
The main advantage of trading using opposite Geodrill and LithiumBank Resources positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Geodrill position performs unexpectedly, LithiumBank 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 LithiumBank Resources will offset losses from the drop in LithiumBank Resources' long position.| Geodrill vs. Stria Lithium | Geodrill vs. Dynacor Gold Mines | Geodrill vs. Foraco International SA | Geodrill vs. Hammond Power Solutions |
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 Markets Map module to get a quick overview of global market snapshot using zoomable world map. Drill down to check world indexes.
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