Correlation Between Green Technology and Lithium Ionic
Can any of the company-specific risk be diversified away by investing in both Green Technology and Lithium Ionic 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 Green Technology and Lithium Ionic into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Green Technology Metals and Lithium Ionic Corp, you can compare the effects of market volatilities on Green Technology and Lithium Ionic 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 Green Technology with a short position of Lithium Ionic. Check out your portfolio center. Please also check ongoing floating volatility patterns of Green Technology and Lithium Ionic.
Diversification Opportunities for Green Technology and Lithium Ionic
0.25 | Correlation Coefficient |
Modest diversification
The 3 months correlation between Green and Lithium is 0.25. Overlapping area represents the amount of risk that can be diversified away by holding Green Technology Metals and Lithium Ionic Corp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Lithium Ionic Corp and Green Technology 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 Green Technology Metals are associated (or correlated) with Lithium Ionic. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Lithium Ionic Corp has no effect on the direction of Green Technology i.e., Green Technology and Lithium Ionic go up and down completely randomly.
Pair Corralation between Green Technology and Lithium Ionic
Assuming the 90 days horizon Green Technology Metals is expected to under-perform the Lithium Ionic. But the pink sheet apears to be less risky and, when comparing its historical volatility, Green Technology Metals is 1.58 times less risky than Lithium Ionic. The pink sheet trades about -0.02 of its potential returns per unit of risk. The Lithium Ionic Corp is currently generating about -0.01 of returns per unit of risk over similar time horizon. If you would invest 61.00 in Lithium Ionic Corp on November 5, 2024 and sell it today you would lose (2.00) from holding Lithium Ionic Corp or give up 3.28% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 95.24% |
| Values | Daily Returns |
Green Technology Metals vs. Lithium Ionic Corp
Performance |
| Timeline |
| Green Technology Metals |
| Lithium Ionic Corp |
Green Technology and Lithium Ionic Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Green Technology and Lithium Ionic
The main advantage of trading using opposite Green Technology and Lithium Ionic positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Green Technology position performs unexpectedly, Lithium Ionic 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 Lithium Ionic will offset losses from the drop in Lithium Ionic's long position.| Green Technology vs. Lake Resources NL | Green Technology vs. Arizona Lithium Limited | Green Technology vs. Sayona Mining Limited | Green Technology vs. Argosy Minerals Limited |
| Lithium Ionic vs. IGO Limited | Lithium Ionic vs. Grid Metals Corp | Lithium Ionic vs. First American Silver | Lithium Ionic vs. Qubec Nickel Corp |
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 Equity Valuation module to check real value of public entities based on technical and fundamental data.
Other Complementary Tools
| Efficient Frontier Plot and analyze your portfolio and positions against risk-return landscape of the market. | |
| Performance Analysis Check effects of mean-variance optimization against your current asset allocation | |
| Price Exposure Probability Analyze equity upside and downside potential for a given time horizon across multiple markets | |
| ETF Categories List of ETF categories grouped based on various criteria, such as the investment strategy or type of investments | |
| Risk-Return Analysis View associations between returns expected from investment and the risk you assume |