Correlation Between Hudson Resources and American Lithium
Can any of the company-specific risk be diversified away by investing in both Hudson Resources and American 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 Hudson Resources and American Lithium into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Hudson Resources and American Lithium Corp, you can compare the effects of market volatilities on Hudson Resources and American 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 Hudson Resources with a short position of American Lithium. Check out your portfolio center. Please also check ongoing floating volatility patterns of Hudson Resources and American Lithium.
Diversification Opportunities for Hudson Resources and American Lithium
0.18 | Correlation Coefficient |
Average diversification
The 3 months correlation between Hudson and American is 0.18. Overlapping area represents the amount of risk that can be diversified away by holding Hudson Resources and American Lithium Corp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on American Lithium Corp and Hudson Resources 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 Hudson Resources are associated (or correlated) with American Lithium. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of American Lithium Corp has no effect on the direction of Hudson Resources i.e., Hudson Resources and American Lithium go up and down completely randomly.
Pair Corralation between Hudson Resources and American Lithium
If you would invest 1.24 in Hudson Resources on November 2, 2024 and sell it today you would earn a total of 0.59 from holding Hudson Resources or generate 47.58% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 5.26% |
| Values | Daily Returns |
Hudson Resources vs. American Lithium Corp
Performance |
| Timeline |
| Hudson Resources |
| American Lithium Corp |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Very Weak
Hudson Resources and American Lithium Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Hudson Resources and American Lithium
The main advantage of trading using opposite Hudson Resources and American Lithium positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Hudson Resources position performs unexpectedly, American 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 American Lithium will offset losses from the drop in American Lithium's long position.| Hudson Resources vs. Macmahon Holdings Limited | Hudson Resources vs. Rokmaster Resources Corp | Hudson Resources vs. Thunder Gold Corp | Hudson Resources vs. Prime Meridian Resources |
| American Lithium vs. Frontier Lithium | American Lithium vs. Cypress Development Corp | American Lithium vs. Rock Tech 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 Equity Analysis module to research over 250,000 global equities including funds, stocks and ETFs to find investment opportunities.
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