Correlation Between Infinico Metals and American Lithium
Can any of the company-specific risk be diversified away by investing in both Infinico Metals and American 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 Infinico Metals and American Lithium 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 American Lithium Corp, you can compare the effects of market volatilities on Infinico Metals and American 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 Infinico Metals with a short position of American Lithium. Check out your portfolio center. Please also check ongoing floating volatility patterns of Infinico Metals and American Lithium.
Diversification Opportunities for Infinico Metals and American Lithium
0.48 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Infinico and American is 0.48. Overlapping area represents the amount of risk that can be diversified away by holding Infinico Metals Corp and American Lithium Corp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on American Lithium 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 American Lithium. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of American Lithium Corp has no effect on the direction of Infinico Metals i.e., Infinico Metals and American Lithium go up and down completely randomly.
Pair Corralation between Infinico Metals and American Lithium
Assuming the 90 days trading horizon Infinico Metals Corp is expected to generate 5.79 times more return on investment than American Lithium. However, Infinico Metals is 5.79 times more volatile than American Lithium Corp. It trades about 0.02 of its potential returns per unit of risk. American Lithium Corp is currently generating about -0.01 per unit of risk. If you would invest 2.00 in Infinico Metals Corp on October 23, 2024 and sell it today you would lose (0.50) from holding Infinico Metals Corp or give up 25.0% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 94.44% |
| Values | Daily Returns |
Infinico Metals Corp vs. American Lithium Corp
Performance |
| Timeline |
| Infinico Metals Corp |
| American Lithium Corp |
Infinico Metals and American Lithium Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Infinico Metals and American Lithium
The main advantage of trading using opposite Infinico Metals and American Lithium positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Infinico Metals position performs unexpectedly, American 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 American Lithium will offset losses from the drop in American Lithium's long position.| Infinico Metals vs. Lion One Metals | Infinico Metals vs. New Found Gold | Infinico Metals vs. Eskay Mining Corp | Infinico Metals vs. Labrador Gold Corp |
| American Lithium vs. Tree Island Steel | American Lithium vs. CI Financial Corp | American Lithium vs. Cogeco Communications | American Lithium vs. Financial 15 Split |
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 Equity Valuation module to check real value of public entities based on technical and fundamental data.
Other Complementary Tools
| Instant Ratings Determine any equity ratings based on digital recommendations. Macroaxis instant equity ratings are based on combination of fundamental analysis and risk-adjusted market performance | |
| Insider Screener Find insiders across different sectors to evaluate their impact on performance | |
| Theme Ratings Determine theme ratings based on digital equity recommendations. Macroaxis theme ratings are based on combination of fundamental analysis and risk-adjusted market performance | |
| Price Ceiling Movement Calculate and plot Price Ceiling Movement for different equity instruments | |
| Sectors List of equity sectors categorizing publicly traded companies based on their primary business activities |