Correlation Between LithiumBank Resources and Air Transport
Can any of the company-specific risk be diversified away by investing in both LithiumBank Resources and Air Transport 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 Air Transport 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 Air Transport Services, you can compare the effects of market volatilities on LithiumBank Resources and Air Transport 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 Air Transport. Check out your portfolio center. Please also check ongoing floating volatility patterns of LithiumBank Resources and Air Transport.
Diversification Opportunities for LithiumBank Resources and Air Transport
-0.84 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between LithiumBank and Air is -0.84. Overlapping area represents the amount of risk that can be diversified away by holding LithiumBank Resources Corp and Air Transport Services in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Air Transport Services 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 Air Transport. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Air Transport Services has no effect on the direction of LithiumBank Resources i.e., LithiumBank Resources and Air Transport go up and down completely randomly.
Pair Corralation between LithiumBank Resources and Air Transport
Assuming the 90 days horizon LithiumBank Resources Corp is expected to under-perform the Air Transport. In addition to that, LithiumBank Resources is 1.39 times more volatile than Air Transport Services. It trades about -0.03 of its total potential returns per unit of risk. Air Transport Services is currently generating about 0.0 per unit of volatility. If you would invest 2,768 in Air Transport Services on September 3, 2024 and sell it today you would lose (572.00) from holding Air Transport Services or give up 20.66% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
LithiumBank Resources Corp vs. Air Transport Services
Performance |
| Timeline |
| LithiumBank Resources |
| Air Transport Services |
LithiumBank Resources and Air Transport Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with LithiumBank Resources and Air Transport
The main advantage of trading using opposite LithiumBank Resources and Air Transport positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if LithiumBank Resources position performs unexpectedly, Air Transport 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 Air Transport will offset losses from the drop in Air Transport's long position.| LithiumBank Resources vs. Qubec Nickel Corp | LithiumBank Resources vs. IGO Limited | LithiumBank Resources vs. Anson Resources Limited | LithiumBank Resources vs. Avarone Metals |
| Air Transport vs. Copa Holdings SA | Air Transport vs. SkyWest | Air Transport vs. Sun Country Airlines | Air Transport vs. Frontier Group Holdings |
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 Fundamentals Comparison module to compare fundamentals across multiple equities to find investing opportunities.
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