Correlation Between International Lithium and Grid Metals
Can any of the company-specific risk be diversified away by investing in both International Lithium and Grid 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 Grid 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 Grid Metals Corp, you can compare the effects of market volatilities on International Lithium and Grid 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 Grid Metals. Check out your portfolio center. Please also check ongoing floating volatility patterns of International Lithium and Grid Metals.
Diversification Opportunities for International Lithium and Grid Metals
0.14 | Correlation Coefficient |
Average diversification
The 3 months correlation between International and Grid is 0.14. Overlapping area represents the amount of risk that can be diversified away by holding International Lithium Corp and Grid Metals Corp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Grid Metals Corp 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 Grid Metals. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Grid Metals Corp has no effect on the direction of International Lithium i.e., International Lithium and Grid Metals go up and down completely randomly.
Pair Corralation between International Lithium and Grid Metals
Assuming the 90 days horizon International Lithium Corp is expected to generate 1.45 times more return on investment than Grid Metals. However, International Lithium is 1.45 times more volatile than Grid Metals Corp. It trades about 0.05 of its potential returns per unit of risk. Grid Metals Corp is currently generating about -0.18 per unit of risk. If you would invest 1.10 in International Lithium Corp on August 29, 2024 and sell it today you would lose (0.02) from holding International Lithium Corp or give up 1.82% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
International Lithium Corp vs. Grid Metals Corp
Performance |
| Timeline |
| International Lithium |
| Grid Metals Corp |
International Lithium and Grid Metals Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with International Lithium and Grid Metals
The main advantage of trading using opposite International Lithium and Grid Metals positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if International Lithium position performs unexpectedly, Grid 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 Grid Metals will offset losses from the drop in Grid Metals' long position.| International Lithium vs. Rockridge Resources | International Lithium vs. Ameriwest Lithium | International Lithium vs. Osisko Metals Incorporated | International Lithium vs. Volt 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 Premium Stories module to follow Macroaxis premium stories from verified contributors across different equity types, categories and coverage scope.
Other Complementary Tools
| Options Analysis Analyze and evaluate options and option chains as a potential hedge for your portfolios | |
| Portfolio Backtesting Avoid under-diversification and over-optimization by backtesting your portfolios | |
| Share Portfolio Track or share privately all of your investments from the convenience of any device | |
| Sign In To Macroaxis Sign in to explore Macroaxis' wealth optimization platform and fintech modules | |
| FinTech Suite Use AI to screen and filter profitable investment opportunities |