Correlation Between Lithium Americas and Fury Gold
Can any of the company-specific risk be diversified away by investing in both Lithium Americas and Fury Gold 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 Lithium Americas and Fury Gold into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Lithium Americas Corp and Fury Gold Mines, you can compare the effects of market volatilities on Lithium Americas and Fury Gold 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 Lithium Americas with a short position of Fury Gold. Check out your portfolio center. Please also check ongoing floating volatility patterns of Lithium Americas and Fury Gold.
Diversification Opportunities for Lithium Americas and Fury Gold
0.61 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Lithium and Fury is 0.61. Overlapping area represents the amount of risk that can be diversified away by holding Lithium Americas Corp and Fury Gold Mines in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Fury Gold Mines and Lithium Americas 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 Lithium Americas Corp are associated (or correlated) with Fury Gold. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Fury Gold Mines has no effect on the direction of Lithium Americas i.e., Lithium Americas and Fury Gold go up and down completely randomly.
Pair Corralation between Lithium Americas and Fury Gold
Given the investment horizon of 90 days Lithium Americas Corp is expected to under-perform the Fury Gold. But the stock apears to be less risky and, when comparing its historical volatility, Lithium Americas Corp is 1.11 times less risky than Fury Gold. The stock trades about -0.04 of its potential returns per unit of risk. The Fury Gold Mines is currently generating about 0.02 of returns per unit of risk over similar time horizon. If you would invest 38.00 in Fury Gold Mines on August 24, 2024 and sell it today you would earn a total of 3.50 from holding Fury Gold Mines or generate 9.21% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Lithium Americas Corp vs. Fury Gold Mines
Performance |
| Timeline |
| Lithium Americas Corp |
| Fury Gold Mines |
Lithium Americas and Fury Gold Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Lithium Americas and Fury Gold
The main advantage of trading using opposite Lithium Americas and Fury Gold positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Lithium Americas position performs unexpectedly, Fury Gold 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 Fury Gold will offset losses from the drop in Fury Gold's long position.| Lithium Americas vs. Dolphin Entertainment | Lithium Americas vs. Cleantech Power Corp | Lithium Americas vs. PennantPark Floating Rate | Lithium Americas vs. Organic Sales and |
| Fury Gold vs. EMX Royalty Corp | Fury Gold vs. Western Copper and | Fury Gold vs. Nevada King Gold | Fury Gold vs. Aftermath Silver |
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 Manager module to state of the art Portfolio Manager to monitor and improve performance of your invested capital.
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