Correlation Between Infinico Metals and Lithium Americas
Can any of the company-specific risk be diversified away by investing in both Infinico Metals and Lithium Americas 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 Infinico Metals and Lithium Americas into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Infinico Metals Corp and Lithium Americas Corp, you can compare the effects of market volatilities on Infinico Metals and Lithium Americas 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 Infinico Metals with a short position of Lithium Americas. Check out your portfolio center. Please also check ongoing floating volatility patterns of Infinico Metals and Lithium Americas.
Diversification Opportunities for Infinico Metals and Lithium Americas
0.61 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Infinico and Lithium is 0.61. Overlapping area represents the amount of risk that can be diversified away by holding Infinico Metals Corp and Lithium Americas Corp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Lithium Americas Corp and Infinico Metals 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 Infinico Metals Corp are associated (or correlated) with Lithium Americas. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Lithium Americas Corp has no effect on the direction of Infinico Metals i.e., Infinico Metals and Lithium Americas go up and down completely randomly.
Pair Corralation between Infinico Metals and Lithium Americas
Assuming the 90 days trading horizon Infinico Metals Corp is expected to generate 5.79 times more return on investment than Lithium Americas. However, Infinico Metals is 5.79 times more volatile than Lithium Americas Corp. It trades about 0.08 of its potential returns per unit of risk. Lithium Americas Corp is currently generating about -0.06 per unit of risk. If you would invest 1.50 in Infinico Metals Corp on November 11, 2024 and sell it today you would earn a total of 0.00 from holding Infinico Metals Corp or generate 0.0% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Infinico Metals Corp vs. Lithium Americas Corp
Performance |
| Timeline |
| Infinico Metals Corp |
| Lithium Americas Corp |
Infinico Metals and Lithium Americas Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Infinico Metals and Lithium Americas
The main advantage of trading using opposite Infinico Metals and Lithium Americas positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Infinico Metals position performs unexpectedly, Lithium Americas 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 Lithium Americas will offset losses from the drop in Lithium Americas' long position.| Infinico Metals vs. Canlan Ice Sports | Infinico Metals vs. Tree Island Steel | Infinico Metals vs. WELL Health Technologies | Infinico Metals vs. UnitedHealth Group CDR |
| Lithium Americas vs. American Lithium Corp | Lithium Americas vs. Ballard Power Systems | Lithium Americas vs. Lightspeed Commerce | Lithium Americas vs. WELL Health Technologies |
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 Portfolio Diagnostics module to use generated alerts and portfolio events aggregator to diagnose current holdings.
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