Correlation Between International Lithium and GéoMégA Resources
Can any of the company-specific risk be diversified away by investing in both International Lithium and GéoMégA Resources 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 GéoMégA Resources 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 GoMgA Resources, you can compare the effects of market volatilities on International Lithium and GéoMégA Resources 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 GéoMégA Resources. Check out your portfolio center. Please also check ongoing floating volatility patterns of International Lithium and GéoMégA Resources.
Diversification Opportunities for International Lithium and GéoMégA Resources
0.43 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between International and GéoMégA is 0.43. Overlapping area represents the amount of risk that can be diversified away by holding International Lithium Corp and GoMgA Resources in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on GéoMégA Resources 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 GéoMégA Resources. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of GéoMégA Resources has no effect on the direction of International Lithium i.e., International Lithium and GéoMégA Resources go up and down completely randomly.
Pair Corralation between International Lithium and GéoMégA Resources
Assuming the 90 days horizon International Lithium Corp is expected to under-perform the GéoMégA Resources. In addition to that, International Lithium is 1.25 times more volatile than GoMgA Resources. It trades about -0.02 of its total potential returns per unit of risk. GoMgA Resources is currently generating about -0.02 per unit of volatility. If you would invest 7.00 in GoMgA Resources on November 27, 2024 and sell it today you would lose (1.00) from holding GoMgA Resources or give up 14.29% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
International Lithium Corp vs. GoMgA Resources
Performance |
| Timeline |
| International Lithium |
| GéoMégA Resources |
International Lithium and GéoMégA Resources Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with International Lithium and GéoMégA Resources
The main advantage of trading using opposite International Lithium and GéoMégA Resources positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if International Lithium position performs unexpectedly, GéoMégA Resources 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 GéoMégA Resources will offset losses from the drop in GéoMégA Resources' 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 |
| GéoMégA Resources vs. Infinite Ore Corp | GéoMégA Resources vs. FPX Nickel Corp | GéoMégA Resources vs. Power Metals Corp | GéoMégA Resources vs. International Lithium 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 Portfolio Holdings module to check your current holdings and cash postion to detemine if your portfolio needs rebalancing.
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