Correlation Between Lithium Americas and China Southern
Can any of the company-specific risk be diversified away by investing in both Lithium Americas and China Southern 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 China Southern 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 China Southern Airlines, you can compare the effects of market volatilities on Lithium Americas and China Southern 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 China Southern. Check out your portfolio center. Please also check ongoing floating volatility patterns of Lithium Americas and China Southern.
Diversification Opportunities for Lithium Americas and China Southern
0.0 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between Lithium and China is 0.0. Overlapping area represents the amount of risk that can be diversified away by holding Lithium Americas Corp and China Southern Airlines in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on China Southern Airlines 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 China Southern. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of China Southern Airlines has no effect on the direction of Lithium Americas i.e., Lithium Americas and China Southern go up and down completely randomly.
Pair Corralation between Lithium Americas and China Southern
If you would invest 3,697 in China Southern Airlines on November 3, 2024 and sell it today you would earn a total of 0.00 from holding China Southern Airlines or generate 0.0% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Flat |
| Strength | Insignificant |
| Accuracy | 4.76% |
| Values | Daily Returns |
Lithium Americas Corp vs. China Southern Airlines
Performance |
| Timeline |
| Lithium Americas Corp |
| China Southern Airlines |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Very Weak
Lithium Americas and China Southern Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Lithium Americas and China Southern
The main advantage of trading using opposite Lithium Americas and China Southern positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Lithium Americas position performs unexpectedly, China Southern 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 China Southern will offset losses from the drop in China Southern's 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 |
| China Southern vs. Neogen | China Southern vs. AG Mortgage Investment | China Southern vs. Capital Clean Energy | China Southern vs. Teleflex Incorporated |
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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