Correlation Between LithiumBank Resources and Canada Nickel
Can any of the company-specific risk be diversified away by investing in both LithiumBank Resources and Canada Nickel 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 Canada Nickel 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 Canada Nickel, you can compare the effects of market volatilities on LithiumBank Resources and Canada Nickel 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 Canada Nickel. Check out your portfolio center. Please also check ongoing floating volatility patterns of LithiumBank Resources and Canada Nickel.
Diversification Opportunities for LithiumBank Resources and Canada Nickel
0.64 | Correlation Coefficient |
Poor diversification
The 3 months correlation between LithiumBank and Canada is 0.64. Overlapping area represents the amount of risk that can be diversified away by holding LithiumBank Resources Corp and Canada Nickel in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Canada Nickel 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 Canada Nickel. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Canada Nickel has no effect on the direction of LithiumBank Resources i.e., LithiumBank Resources and Canada Nickel go up and down completely randomly.
Pair Corralation between LithiumBank Resources and Canada Nickel
Assuming the 90 days horizon LithiumBank Resources Corp is expected to under-perform the Canada Nickel. In addition to that, LithiumBank Resources is 1.26 times more volatile than Canada Nickel. It trades about -0.03 of its total potential returns per unit of risk. Canada Nickel is currently generating about -0.01 per unit of volatility. If you would invest 121.00 in Canada Nickel on September 3, 2024 and sell it today you would lose (51.00) from holding Canada Nickel or give up 42.15% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
LithiumBank Resources Corp vs. Canada Nickel
Performance |
| Timeline |
| LithiumBank Resources |
| Canada Nickel |
LithiumBank Resources and Canada Nickel Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with LithiumBank Resources and Canada Nickel
The main advantage of trading using opposite LithiumBank Resources and Canada Nickel positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if LithiumBank Resources position performs unexpectedly, Canada Nickel 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 Canada Nickel will offset losses from the drop in Canada Nickel'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 |
| Canada Nickel vs. Qubec Nickel Corp | Canada Nickel vs. IGO Limited | Canada Nickel vs. Anson Resources Limited | Canada Nickel vs. Avarone Metals |
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 Holdings module to check your current holdings and cash postion to detemine if your portfolio needs rebalancing.
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