Correlation Between Giga Metals and Frontier Lithium
Can any of the company-specific risk be diversified away by investing in both Giga Metals and Frontier 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 Giga Metals and Frontier Lithium into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Giga Metals and Frontier Lithium, you can compare the effects of market volatilities on Giga Metals and Frontier 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 Giga Metals with a short position of Frontier Lithium. Check out your portfolio center. Please also check ongoing floating volatility patterns of Giga Metals and Frontier Lithium.
Diversification Opportunities for Giga Metals and Frontier Lithium
0.68 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Giga and Frontier is 0.68. Overlapping area represents the amount of risk that can be diversified away by holding Giga Metals and Frontier Lithium in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Frontier Lithium and Giga Metals 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 Giga Metals are associated (or correlated) with Frontier Lithium. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Frontier Lithium has no effect on the direction of Giga Metals i.e., Giga Metals and Frontier Lithium go up and down completely randomly.
Pair Corralation between Giga Metals and Frontier Lithium
If you would invest 19.00 in Giga Metals on September 1, 2024 and sell it today you would earn a total of 0.00 from holding Giga Metals or generate 0.0% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 0.53% |
| Values | Daily Returns |
Giga Metals vs. Frontier Lithium
Performance |
| Timeline |
| Giga Metals |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Very Weak
| Frontier Lithium |
Giga Metals and Frontier Lithium Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Giga Metals and Frontier Lithium
The main advantage of trading using opposite Giga Metals and Frontier Lithium positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Giga Metals position performs unexpectedly, Frontier 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 Frontier Lithium will offset losses from the drop in Frontier Lithium's long position.| Giga Metals vs. Canada Nickel | Giga Metals vs. Giga Metals Corp | Giga Metals vs. Talon Metals Corp | Giga Metals vs. FPX Nickel Corp |
| Frontier Lithium vs. Vision Lithium | Frontier Lithium vs. Critical Elements | Frontier Lithium vs. Cypress Development Corp | Frontier Lithium vs. Core Lithium |
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 Watchlist Optimization module to optimize watchlists to build efficient portfolios or rebalance existing positions based on the mean-variance optimization algorithm.
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