Correlation Between LithiumBank Resources and Cebu Air
Can any of the company-specific risk be diversified away by investing in both LithiumBank Resources and Cebu Air 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 Cebu Air 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 Cebu Air ADR, you can compare the effects of market volatilities on LithiumBank Resources and Cebu Air 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 Cebu Air. Check out your portfolio center. Please also check ongoing floating volatility patterns of LithiumBank Resources and Cebu Air.
Diversification Opportunities for LithiumBank Resources and Cebu Air
0.88 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between LithiumBank and Cebu is 0.88. Overlapping area represents the amount of risk that can be diversified away by holding LithiumBank Resources Corp and Cebu Air ADR in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Cebu Air ADR 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 Cebu Air. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Cebu Air ADR has no effect on the direction of LithiumBank Resources i.e., LithiumBank Resources and Cebu Air go up and down completely randomly.
Pair Corralation between LithiumBank Resources and Cebu Air
If you would invest 185.00 in Cebu Air ADR on September 12, 2024 and sell it today you would earn a total of 0.00 from holding Cebu Air ADR or generate 0.0% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 95.45% |
| Values | Daily Returns |
LithiumBank Resources Corp vs. Cebu Air ADR
Performance |
| Timeline |
| LithiumBank Resources |
| Cebu Air ADR |
LithiumBank Resources and Cebu Air Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with LithiumBank Resources and Cebu Air
The main advantage of trading using opposite LithiumBank Resources and Cebu Air positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if LithiumBank Resources position performs unexpectedly, Cebu Air 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 Cebu Air will offset losses from the drop in Cebu Air's long position.| LithiumBank Resources vs. Qubec Nickel Corp | LithiumBank Resources vs. IGO Limited | LithiumBank Resources vs. Focus Graphite | LithiumBank Resources vs. Mineral Res |
| Cebu Air vs. Finnair Oyj | Cebu Air vs. easyJet plc | Cebu Air vs. Norse Atlantic ASA | Cebu Air vs. Air New Zealand |
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 Money Flow Index module to determine momentum by analyzing Money Flow Index and other technical indicators.
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