Correlation Between LithiumBank Resources and Collective Mining
Can any of the company-specific risk be diversified away by investing in both LithiumBank Resources and Collective Mining 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 Collective Mining 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 Collective Mining, you can compare the effects of market volatilities on LithiumBank Resources and Collective Mining 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 Collective Mining. Check out your portfolio center. Please also check ongoing floating volatility patterns of LithiumBank Resources and Collective Mining.
Diversification Opportunities for LithiumBank Resources and Collective Mining
-0.46 | Correlation Coefficient |
Very good diversification
The 3 months correlation between LithiumBank and Collective is -0.46. Overlapping area represents the amount of risk that can be diversified away by holding LithiumBank Resources Corp and Collective Mining in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Collective Mining 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 Collective Mining. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Collective Mining has no effect on the direction of LithiumBank Resources i.e., LithiumBank Resources and Collective Mining go up and down completely randomly.
Pair Corralation between LithiumBank Resources and Collective Mining
Assuming the 90 days horizon LithiumBank Resources Corp is expected to under-perform the Collective Mining. In addition to that, LithiumBank Resources is 1.68 times more volatile than Collective Mining. It trades about -0.26 of its total potential returns per unit of risk. Collective Mining is currently generating about -0.16 per unit of volatility. If you would invest 382.00 in Collective Mining on September 2, 2024 and sell it today you would lose (29.00) from holding Collective Mining or give up 7.59% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
LithiumBank Resources Corp vs. Collective Mining
Performance |
| Timeline |
| LithiumBank Resources |
| Collective Mining |
LithiumBank Resources and Collective Mining Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with LithiumBank Resources and Collective Mining
The main advantage of trading using opposite LithiumBank Resources and Collective Mining positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if LithiumBank Resources position performs unexpectedly, Collective Mining 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 Collective Mining will offset losses from the drop in Collective Mining's long position.| LithiumBank Resources vs. Qubec Nickel Corp | LithiumBank Resources vs. IGO Limited | LithiumBank Resources vs. Focus Graphite | LithiumBank Resources vs. Mineral Res |
| Collective Mining vs. LithiumBank Resources Corp | Collective Mining vs. NioCorp Developments Ltd | Collective Mining vs. Corporacion America Airports | Collective Mining vs. AerSale Corp |
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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