Correlation Between Interra Copper and International Lithium
Can any of the company-specific risk be diversified away by investing in both Interra Copper and International Lithium 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 Interra Copper and International Lithium into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Interra Copper Corp and International Lithium Corp, you can compare the effects of market volatilities on Interra Copper and International Lithium 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 Interra Copper with a short position of International Lithium. Check out your portfolio center. Please also check ongoing floating volatility patterns of Interra Copper and International Lithium.
Diversification Opportunities for Interra Copper and International Lithium
-0.02 | Correlation Coefficient |
Good diversification
The 3 months correlation between Interra and International is -0.02. Overlapping area represents the amount of risk that can be diversified away by holding Interra Copper Corp and International Lithium Corp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on International Lithium and Interra Copper 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 Interra Copper Corp are associated (or correlated) with International Lithium. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of International Lithium has no effect on the direction of Interra Copper i.e., Interra Copper and International Lithium go up and down completely randomly.
Pair Corralation between Interra Copper and International Lithium
Assuming the 90 days horizon Interra Copper is expected to generate 3.27 times less return on investment than International Lithium. In addition to that, Interra Copper is 1.27 times more volatile than International Lithium Corp. It trades about 0.01 of its total potential returns per unit of risk. International Lithium Corp is currently generating about 0.06 per unit of volatility. If you would invest 1.29 in International Lithium Corp on September 1, 2024 and sell it today you would earn a total of 0.01 from holding International Lithium Corp or generate 0.78% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Interra Copper Corp vs. International Lithium Corp
Performance |
| Timeline |
| Interra Copper Corp |
| International Lithium |
Interra Copper and International Lithium Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Interra Copper and International Lithium
The main advantage of trading using opposite Interra Copper and International Lithium positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Interra Copper position performs unexpectedly, International Lithium 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 International Lithium will offset losses from the drop in International Lithium's long position.| Interra Copper vs. Sherritt International | Interra Copper vs. Metals X Limited | Interra Copper vs. Anglo American PLC | Interra Copper vs. ZincX Resources Corp |
| International Lithium vs. Decade Resources | International Lithium vs. Silver Spruce Resources | International Lithium vs. Grid Metals Corp | International Lithium vs. Canada Rare Earth |
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 Piotroski F Score module to get Piotroski F Score based on the binary analysis strategy of nine different fundamentals.
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