Correlation Between International Lithium and Graphite One
Can any of the company-specific risk be diversified away by investing in both International Lithium and Graphite One 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 Graphite One 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 Graphite One, you can compare the effects of market volatilities on International Lithium and Graphite One 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 Graphite One. Check out your portfolio center. Please also check ongoing floating volatility patterns of International Lithium and Graphite One.
Diversification Opportunities for International Lithium and Graphite One
0.18 | Correlation Coefficient |
Average diversification
The 3 months correlation between International and Graphite is 0.18. Overlapping area represents the amount of risk that can be diversified away by holding International Lithium Corp and Graphite One in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Graphite One 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 Graphite One. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Graphite One has no effect on the direction of International Lithium i.e., International Lithium and Graphite One go up and down completely randomly.
Pair Corralation between International Lithium and Graphite One
Assuming the 90 days horizon International Lithium Corp is expected to generate 3.57 times more return on investment than Graphite One. However, International Lithium is 3.57 times more volatile than Graphite One. It trades about 0.01 of its potential returns per unit of risk. Graphite One is currently generating about 0.01 per unit of risk. If you would invest 1.27 in International Lithium Corp on August 29, 2024 and sell it today you would lose (0.19) from holding International Lithium Corp or give up 14.96% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 97.67% |
| Values | Daily Returns |
International Lithium Corp vs. Graphite One
Performance |
| Timeline |
| International Lithium |
| Graphite One |
International Lithium and Graphite One Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with International Lithium and Graphite One
The main advantage of trading using opposite International Lithium and Graphite One positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if International Lithium position performs unexpectedly, Graphite One 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 Graphite One will offset losses from the drop in Graphite One's long position.| International Lithium vs. Rockridge Resources | International Lithium vs. Ameriwest Lithium | International Lithium vs. Osisko Metals Incorporated | International Lithium vs. Volt Lithium Corp |
| Graphite One vs. Mason Graphite | Graphite One vs. Northern Graphite | Graphite One vs. Lomiko Metals | Graphite One vs. IGO Limited |
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 Economic Indicators module to top statistical indicators that provide insights into how an economy is performing.
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