Correlation Between Kali and US Lithium
Can any of the company-specific risk be diversified away by investing in both Kali and US 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 Kali and US Lithium into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Kali Inc and US Lithium Corp, you can compare the effects of market volatilities on Kali and US 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 Kali with a short position of US Lithium. Check out your portfolio center. Please also check ongoing floating volatility patterns of Kali and US Lithium.
Diversification Opportunities for Kali and US Lithium
1.0 | Correlation Coefficient |
No risk reduction
The 3 months correlation between Kali and LITH is 1.0. Overlapping area represents the amount of risk that can be diversified away by holding Kali Inc and US Lithium Corp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on US Lithium Corp and Kali 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 Kali Inc are associated (or correlated) with US Lithium. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of US Lithium Corp has no effect on the direction of Kali i.e., Kali and US Lithium go up and down completely randomly.
Pair Corralation between Kali and US Lithium
If you would invest 0.04 in US Lithium Corp on August 28, 2024 and sell it today you would earn a total of 0.00 from holding US Lithium Corp or generate 0.0% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Kali Inc vs. US Lithium Corp
Performance |
| Timeline |
| Kali Inc |
| US Lithium Corp |
Kali and US Lithium Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Kali and US Lithium
The main advantage of trading using opposite Kali and US Lithium positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Kali position performs unexpectedly, US 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 US Lithium will offset losses from the drop in US Lithium's long position.| Kali vs. Nutranomics | Kali vs. Ubiquitech Software | Kali vs. Pure Global Cannabis | Kali vs. FutureWorld Corp |
| US Lithium vs. Mc Endvrs | US Lithium vs. Kali Inc | US Lithium vs. One World Pharma | US Lithium vs. HempAmericana |
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 Search module to search for actively traded equities including funds and ETFs from over 30 global markets.
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