Correlation Between Ioneer and Core Lithium
Can any of the company-specific risk be diversified away by investing in both Ioneer and Core 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 Ioneer and Core Lithium into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between ioneer and Core Lithium, you can compare the effects of market volatilities on Ioneer and Core 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 Ioneer with a short position of Core Lithium. Check out your portfolio center. Please also check ongoing floating volatility patterns of Ioneer and Core Lithium.
Diversification Opportunities for Ioneer and Core Lithium
0.58 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Ioneer and Core is 0.58. Overlapping area represents the amount of risk that can be diversified away by holding ioneer and Core Lithium in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Core Lithium and Ioneer 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 ioneer are associated (or correlated) with Core Lithium. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Core Lithium has no effect on the direction of Ioneer i.e., Ioneer and Core Lithium go up and down completely randomly.
Pair Corralation between Ioneer and Core Lithium
Assuming the 90 days horizon ioneer is expected to generate 0.92 times more return on investment than Core Lithium. However, ioneer is 1.09 times less risky than Core Lithium. It trades about 0.02 of its potential returns per unit of risk. Core Lithium is currently generating about -0.01 per unit of risk. If you would invest 26.00 in ioneer on August 30, 2024 and sell it today you would lose (13.00) from holding ioneer or give up 50.0% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
ioneer vs. Core Lithium
Performance |
| Timeline |
| ioneer |
| Core Lithium |
Ioneer and Core Lithium Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Ioneer and Core Lithium
The main advantage of trading using opposite Ioneer and Core Lithium positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Ioneer position performs unexpectedly, Core 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 Core Lithium will offset losses from the drop in Core Lithium's long position.| Ioneer vs. Rockridge Resources | Ioneer vs. Ameriwest Lithium | Ioneer vs. Osisko Metals Incorporated | Ioneer vs. Volt Lithium Corp |
| Core Lithium vs. Macmahon Holdings Limited | Core Lithium vs. Prime Meridian Resources | Core Lithium vs. International Lithium Corp | Core Lithium vs. Hudson Resources |
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 Transaction History module to view history of all your transactions and understand their impact on performance.
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