Correlation Between LithiumBank Resources and Aker ASA
Can any of the company-specific risk be diversified away by investing in both LithiumBank Resources and Aker ASA 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 Aker ASA 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 Aker ASA, you can compare the effects of market volatilities on LithiumBank Resources and Aker ASA 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 Aker ASA. Check out your portfolio center. Please also check ongoing floating volatility patterns of LithiumBank Resources and Aker ASA.
Diversification Opportunities for LithiumBank Resources and Aker ASA
0.7 | Correlation Coefficient |
Poor diversification
The 3 months correlation between LithiumBank and Aker is 0.7. Overlapping area represents the amount of risk that can be diversified away by holding LithiumBank Resources Corp and Aker ASA in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Aker ASA 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 Aker ASA. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Aker ASA has no effect on the direction of LithiumBank Resources i.e., LithiumBank Resources and Aker ASA go up and down completely randomly.
Pair Corralation between LithiumBank Resources and Aker ASA
If you would invest 4,965 in Aker ASA on September 2, 2024 and sell it today you would earn a total of 0.00 from holding Aker ASA or generate 0.0% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 95.45% |
| Values | Daily Returns |
LithiumBank Resources Corp vs. Aker ASA
Performance |
| Timeline |
| LithiumBank Resources |
| Aker ASA |
LithiumBank Resources and Aker ASA Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with LithiumBank Resources and Aker ASA
The main advantage of trading using opposite LithiumBank Resources and Aker ASA positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if LithiumBank Resources position performs unexpectedly, Aker ASA 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 Aker ASA will offset losses from the drop in Aker ASA's long position.| LithiumBank Resources vs. Qubec Nickel Corp | LithiumBank Resources vs. IGO Limited | LithiumBank Resources vs. Focus Graphite | LithiumBank Resources vs. Mineral Res |
| Aker ASA vs. BCB Bancorp | Aker ASA vs. LithiumBank Resources Corp | Aker ASA vs. FiscalNote Holdings | Aker ASA vs. FactSet Research Systems |
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 Comparator module to compare the composition, asset allocations and performance of any two portfolios in your account.
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