Correlation Between International Zeolite and Lithium Americas
Can any of the company-specific risk be diversified away by investing in both International Zeolite 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 International Zeolite and Lithium Americas into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between International Zeolite Corp and Lithium Americas Corp, you can compare the effects of market volatilities on International Zeolite 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 International Zeolite with a short position of Lithium Americas. Check out your portfolio center. Please also check ongoing floating volatility patterns of International Zeolite and Lithium Americas.
Diversification Opportunities for International Zeolite and Lithium Americas
-0.37 | Correlation Coefficient |
Very good diversification
The 3 months correlation between International and Lithium is -0.37. Overlapping area represents the amount of risk that can be diversified away by holding International Zeolite 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 International Zeolite 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 Zeolite 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 International Zeolite i.e., International Zeolite and Lithium Americas go up and down completely randomly.
Pair Corralation between International Zeolite and Lithium Americas
Given the investment horizon of 90 days International Zeolite Corp is expected to generate 1.74 times more return on investment than Lithium Americas. However, International Zeolite is 1.74 times more volatile than Lithium Americas Corp. It trades about 0.02 of its potential returns per unit of risk. Lithium Americas Corp is currently generating about -0.01 per unit of risk. If you would invest 4.50 in International Zeolite Corp on September 4, 2024 and sell it today you would lose (2.00) from holding International Zeolite Corp or give up 44.44% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 99.6% |
| Values | Daily Returns |
International Zeolite Corp vs. Lithium Americas Corp
Performance |
| Timeline |
| International Zeolite |
| Lithium Americas Corp |
International Zeolite and Lithium Americas Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with International Zeolite and Lithium Americas
The main advantage of trading using opposite International Zeolite and Lithium Americas positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if International Zeolite 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.| International Zeolite vs. Grosvenor Resource Corp | International Zeolite vs. Highway 50 Gold | International Zeolite vs. Quartz Mountain Resources |
| 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 Bollinger Bands module to use Bollinger Bands indicator to analyze target price for a given investing horizon.
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