Correlation Between LithiumBank Resources and Mill City
Can any of the company-specific risk be diversified away by investing in both LithiumBank Resources and Mill City 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 Mill City 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 Mill City Ventures, you can compare the effects of market volatilities on LithiumBank Resources and Mill City 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 Mill City. Check out your portfolio center. Please also check ongoing floating volatility patterns of LithiumBank Resources and Mill City.
Diversification Opportunities for LithiumBank Resources and Mill City
0.64 | Correlation Coefficient |
Poor diversification
The 3 months correlation between LithiumBank and Mill is 0.64. Overlapping area represents the amount of risk that can be diversified away by holding LithiumBank Resources Corp and Mill City Ventures in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Mill City Ventures 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 Mill City. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Mill City Ventures has no effect on the direction of LithiumBank Resources i.e., LithiumBank Resources and Mill City go up and down completely randomly.
Pair Corralation between LithiumBank Resources and Mill City
Assuming the 90 days horizon LithiumBank Resources Corp is expected to under-perform the Mill City. In addition to that, LithiumBank Resources is 1.14 times more volatile than Mill City Ventures. It trades about -0.33 of its total potential returns per unit of risk. Mill City Ventures is currently generating about -0.22 per unit of volatility. If you would invest 211.00 in Mill City Ventures on August 24, 2024 and sell it today you would lose (32.00) from holding Mill City Ventures or give up 15.17% 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. Mill City Ventures
Performance |
| Timeline |
| LithiumBank Resources |
| Mill City Ventures |
LithiumBank Resources and Mill City Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with LithiumBank Resources and Mill City
The main advantage of trading using opposite LithiumBank Resources and Mill City positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if LithiumBank Resources position performs unexpectedly, Mill City 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 Mill City will offset losses from the drop in Mill City's long position.| LithiumBank Resources vs. Norra Metals Corp | LithiumBank Resources vs. Amarc Resources | LithiumBank Resources vs. ZincX Resources Corp | LithiumBank Resources vs. Nuinsco Resources Limited |
| Mill City vs. Consumer Portfolio Services | Mill City vs. Atlanticus Holdings Corp | Mill City vs. Nelnet Inc | Mill City vs. Senmiao Technology |
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 USA ETFs module to find actively traded Exchange Traded Funds (ETF) in USA.
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