Correlation Between LithiumBank Resources and Affiliated Resources
Can any of the company-specific risk be diversified away by investing in both LithiumBank Resources and Affiliated Resources 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 Affiliated Resources 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 Affiliated Resources Corp, you can compare the effects of market volatilities on LithiumBank Resources and Affiliated Resources 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 Affiliated Resources. Check out your portfolio center. Please also check ongoing floating volatility patterns of LithiumBank Resources and Affiliated Resources.
Diversification Opportunities for LithiumBank Resources and Affiliated Resources
0.75 | Correlation Coefficient |
Poor diversification
The 3 months correlation between LithiumBank and Affiliated is 0.75. Overlapping area represents the amount of risk that can be diversified away by holding LithiumBank Resources Corp and Affiliated Resources Corp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Affiliated Resources Corp 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 Affiliated Resources. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Affiliated Resources Corp has no effect on the direction of LithiumBank Resources i.e., LithiumBank Resources and Affiliated Resources go up and down completely randomly.
Pair Corralation between LithiumBank Resources and Affiliated Resources
Assuming the 90 days horizon LithiumBank Resources Corp is expected to under-perform the Affiliated Resources. But the otc stock apears to be less risky and, when comparing its historical volatility, LithiumBank Resources Corp is 2.58 times less risky than Affiliated Resources. The otc stock trades about -0.19 of its potential returns per unit of risk. The Affiliated Resources Corp is currently generating about 0.15 of returns per unit of risk over similar time horizon. If you would invest 2.50 in Affiliated Resources Corp on September 3, 2024 and sell it today you would earn a total of 6.49 from holding Affiliated Resources Corp or generate 259.6% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 99.21% |
| Values | Daily Returns |
LithiumBank Resources Corp vs. Affiliated Resources Corp
Performance |
| Timeline |
| LithiumBank Resources |
| Affiliated Resources Corp |
LithiumBank Resources and Affiliated Resources Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with LithiumBank Resources and Affiliated Resources
The main advantage of trading using opposite LithiumBank Resources and Affiliated Resources positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if LithiumBank Resources position performs unexpectedly, Affiliated Resources 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 Affiliated Resources will offset losses from the drop in Affiliated Resources' long position.| LithiumBank Resources vs. Qubec Nickel Corp | LithiumBank Resources vs. IGO Limited | LithiumBank Resources vs. Avarone Metals | LithiumBank Resources vs. Adriatic Metals PLC |
| Affiliated Resources vs. OppFi Inc | Affiliated Resources vs. Fortinet | Affiliated Resources vs. Brera Holdings PLC | Affiliated Resources vs. MetLife |
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 Earnings Calls module to check upcoming earnings announcements updated hourly across public exchanges.
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