Correlation Between International Lithium and ATT
Can any of the company-specific risk be diversified away by investing in both International Lithium and ATT 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 ATT 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 ATT Inc, you can compare the effects of market volatilities on International Lithium and ATT 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 ATT. Check out your portfolio center. Please also check ongoing floating volatility patterns of International Lithium and ATT.
Diversification Opportunities for International Lithium and ATT
-0.43 | Correlation Coefficient |
Very good diversification
The 3 months correlation between International and ATT is -0.43. Overlapping area represents the amount of risk that can be diversified away by holding International Lithium Corp and ATT Inc in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on ATT Inc 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 ATT. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of ATT Inc has no effect on the direction of International Lithium i.e., International Lithium and ATT go up and down completely randomly.
Pair Corralation between International Lithium and ATT
Assuming the 90 days horizon International Lithium Corp is expected to generate 7.68 times more return on investment than ATT. However, International Lithium is 7.68 times more volatile than ATT Inc. It trades about 0.03 of its potential returns per unit of risk. ATT Inc is currently generating about 0.18 per unit of risk. If you would invest 1.50 in International Lithium Corp on September 3, 2024 and sell it today you would lose (0.22) from holding International Lithium Corp or give up 14.67% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
International Lithium Corp vs. ATT Inc
Performance |
| Timeline |
| International Lithium |
| ATT Inc |
International Lithium and ATT Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with International Lithium and ATT
The main advantage of trading using opposite International Lithium and ATT positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if International Lithium position performs unexpectedly, ATT 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 ATT will offset losses from the drop in ATT's long position.| International Lithium vs. Qubec Nickel Corp | International Lithium vs. IGO Limited | International Lithium vs. Avarone Metals | International Lithium vs. Adriatic Metals PLC |
| ATT vs. Highway Holdings Limited | ATT vs. QCR Holdings | ATT vs. Partner Communications | ATT vs. Acumen Pharmaceuticals |
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 Top Crypto Exchanges module to search and analyze digital assets across top global cryptocurrency exchanges.
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