Correlation Between Imagine Lithium and Grid Metals
Can any of the company-specific risk be diversified away by investing in both Imagine 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 Imagine 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 Imagine Lithium and Grid Metals Corp, you can compare the effects of market volatilities on Imagine 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 Imagine Lithium with a short position of Grid Metals. Check out your portfolio center. Please also check ongoing floating volatility patterns of Imagine Lithium and Grid Metals.
Diversification Opportunities for Imagine Lithium and Grid Metals
-0.22 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Imagine and Grid is -0.22. Overlapping area represents the amount of risk that can be diversified away by holding Imagine Lithium 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 Imagine 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 Imagine Lithium 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 Imagine Lithium i.e., Imagine Lithium and Grid Metals go up and down completely randomly.
Pair Corralation between Imagine Lithium and Grid Metals
Assuming the 90 days horizon Imagine Lithium is expected to under-perform the Grid Metals. In addition to that, Imagine Lithium is 1.18 times more volatile than Grid Metals Corp. It trades about -0.01 of its total potential returns per unit of risk. Grid Metals Corp is currently generating about 0.02 per unit of volatility. If you would invest 4.00 in Grid Metals Corp on August 31, 2024 and sell it today you would lose (0.50) from holding Grid Metals Corp or give up 12.5% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Imagine Lithium vs. Grid Metals Corp
Performance |
| Timeline |
| Imagine Lithium |
| Grid Metals Corp |
Imagine Lithium and Grid Metals Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Imagine Lithium and Grid Metals
The main advantage of trading using opposite Imagine Lithium and Grid Metals positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Imagine 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.| Imagine Lithium vs. Grid Metals Corp | Imagine Lithium vs. Hawkeye Gold and | Imagine Lithium vs. Fidelity Minerals Corp | Imagine Lithium vs. ExGen Resources |
| Grid Metals vs. Stillwater Critical Minerals | Grid Metals vs. Gungnir Resources | Grid Metals vs. Golden Pursuit Resources | Grid Metals vs. New Age Metals |
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 USA ETFs module to find actively traded Exchange Traded Funds (ETF) in USA.
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