Correlation Between International Lithium and C3 Metals
Can any of the company-specific risk be diversified away by investing in both International Lithium and C3 Metals 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 International Lithium and C3 Metals into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between International Lithium Corp and C3 Metals, you can compare the effects of market volatilities on International Lithium and C3 Metals 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 International Lithium with a short position of C3 Metals. Check out your portfolio center. Please also check ongoing floating volatility patterns of International Lithium and C3 Metals.
Diversification Opportunities for International Lithium and C3 Metals
-0.17 | Correlation Coefficient |
Good diversification
The 3 months correlation between International and CUAUF is -0.17. Overlapping area represents the amount of risk that can be diversified away by holding International Lithium Corp and C3 Metals in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on C3 Metals and International Lithium 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 International Lithium Corp are associated (or correlated) with C3 Metals. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of C3 Metals has no effect on the direction of International Lithium i.e., International Lithium and C3 Metals go up and down completely randomly.
Pair Corralation between International Lithium and C3 Metals
Assuming the 90 days horizon International Lithium Corp is expected to generate 2.51 times more return on investment than C3 Metals. However, International Lithium is 2.51 times more volatile than C3 Metals. It trades about 0.06 of its potential returns per unit of risk. C3 Metals is currently generating about -0.46 per unit of risk. If you would invest 1.29 in International Lithium Corp on September 1, 2024 and sell it today you would earn a total of 0.01 from holding International Lithium Corp or generate 0.78% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 38.1% |
| Values | Daily Returns |
International Lithium Corp vs. C3 Metals
Performance |
| Timeline |
| International Lithium |
| C3 Metals |
International Lithium and C3 Metals Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with International Lithium and C3 Metals
The main advantage of trading using opposite International Lithium and C3 Metals positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if International Lithium position performs unexpectedly, C3 Metals 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 C3 Metals will offset losses from the drop in C3 Metals' long position.| International Lithium vs. Decade Resources | International Lithium vs. Silver Spruce Resources | International Lithium vs. Grid Metals Corp | International Lithium vs. Canada Rare Earth |
| C3 Metals vs. Gouverneur Bancorp | C3 Metals vs. 1911 Gold Corp | C3 Metals vs. YourWay Cannabis Brands | C3 Metals vs. Harfang Exploration |
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 Alpha Finder module to use alpha and beta coefficients to find investment opportunities after accounting for the risk.
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