Correlation Between LithiumBank Resources and Lion One
Can any of the company-specific risk be diversified away by investing in both LithiumBank Resources and Lion One 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 LithiumBank Resources and Lion One into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between LithiumBank Resources Corp and Lion One Metals, you can compare the effects of market volatilities on LithiumBank Resources and Lion One 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 LithiumBank Resources with a short position of Lion One. Check out your portfolio center. Please also check ongoing floating volatility patterns of LithiumBank Resources and Lion One.
Diversification Opportunities for LithiumBank Resources and Lion One
0.55 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between LithiumBank and Lion is 0.55. Overlapping area represents the amount of risk that can be diversified away by holding LithiumBank Resources Corp and Lion One Metals in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Lion One Metals and LithiumBank Resources 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 LithiumBank Resources Corp are associated (or correlated) with Lion One. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Lion One Metals has no effect on the direction of LithiumBank Resources i.e., LithiumBank Resources and Lion One go up and down completely randomly.
Pair Corralation between LithiumBank Resources and Lion One
Assuming the 90 days trading horizon LithiumBank Resources Corp is expected to generate 1.5 times more return on investment than Lion One. However, LithiumBank Resources is 1.5 times more volatile than Lion One Metals. It trades about -0.09 of its potential returns per unit of risk. Lion One Metals is currently generating about -0.14 per unit of risk. If you would invest 33.00 in LithiumBank Resources Corp on September 12, 2024 and sell it today you would lose (5.00) from holding LithiumBank Resources Corp or give up 15.15% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
LithiumBank Resources Corp vs. Lion One Metals
Performance |
| Timeline |
| LithiumBank Resources |
| Lion One Metals |
LithiumBank Resources and Lion One Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with LithiumBank Resources and Lion One
The main advantage of trading using opposite LithiumBank Resources and Lion One positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if LithiumBank Resources position performs unexpectedly, Lion One 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 Lion One will offset losses from the drop in Lion One's long position.| LithiumBank Resources vs. Ressources Minieres Radisson | LithiumBank Resources vs. Galantas Gold Corp | LithiumBank Resources vs. Red Pine Exploration | LithiumBank Resources vs. Kore Mining |
| Lion One vs. Ressources Minieres Radisson | Lion One vs. Galantas Gold Corp | Lion One vs. Red Pine Exploration | Lion One vs. Kore Mining |
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 Stocks Directory module to find actively traded stocks across global markets.
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