Correlation Between Lithium Americas and Major Precious
Can any of the company-specific risk be diversified away by investing in both Lithium Americas and Major Precious 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 Major Precious 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 Major Precious Metals, you can compare the effects of market volatilities on Lithium Americas and Major Precious 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 Major Precious. Check out your portfolio center. Please also check ongoing floating volatility patterns of Lithium Americas and Major Precious.
Diversification Opportunities for Lithium Americas and Major Precious
0.0 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between Lithium and Major is 0.0. Overlapping area represents the amount of risk that can be diversified away by holding Lithium Americas Corp and Major Precious Metals in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Major Precious Metals 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 Major Precious. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Major Precious Metals has no effect on the direction of Lithium Americas i.e., Lithium Americas and Major Precious go up and down completely randomly.
Pair Corralation between Lithium Americas and Major Precious
If you would invest 0.01 in Major Precious Metals on November 3, 2024 and sell it today you would earn a total of 0.00 from holding Major Precious Metals or generate 0.0% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Flat |
| Strength | Insignificant |
| Accuracy | 2.44% |
| Values | Daily Returns |
Lithium Americas Corp vs. Major Precious Metals
Performance |
| Timeline |
| Lithium Americas Corp |
| Major Precious Metals |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Very Weak
Lithium Americas and Major Precious Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Lithium Americas and Major Precious
The main advantage of trading using opposite Lithium Americas and Major Precious positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Lithium Americas position performs unexpectedly, Major Precious 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 Major Precious will offset losses from the drop in Major Precious' long position.| Lithium Americas vs. Sigma Lithium Resources | Lithium Americas vs. Standard Lithium | Lithium Americas vs. Sayona Mining Limited | Lithium Americas vs. MP Materials Corp |
| Major Precious vs. Lithium Americas Corp | Major Precious vs. Sigma Lithium Resources | Major Precious vs. Standard Lithium | Major Precious vs. Sayona Mining Limited |
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 Price Transformation module to use Price Transformation models to analyze the depth of different equity instruments across global markets.
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