Correlation Between LithiumBank Resources and 285512AF6

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Can any of the company-specific risk be diversified away by investing in both LithiumBank Resources and 285512AF6 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 285512AF6 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 EA 295 15 FEB 51, you can compare the effects of market volatilities on LithiumBank Resources and 285512AF6 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 285512AF6. Check out your portfolio center. Please also check ongoing floating volatility patterns of LithiumBank Resources and 285512AF6.

Diversification Opportunities for LithiumBank Resources and 285512AF6

0.76
  Correlation Coefficient

Poor diversification

The 3 months correlation between LithiumBank and 285512AF6 is 0.76. Overlapping area represents the amount of risk that can be diversified away by holding LithiumBank Resources Corp and EA 295 15 FEB 51 in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on EA 295 15 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 285512AF6. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of EA 295 15 has no effect on the direction of LithiumBank Resources i.e., LithiumBank Resources and 285512AF6 go up and down completely randomly.

Pair Corralation between LithiumBank Resources and 285512AF6

Assuming the 90 days horizon LithiumBank Resources Corp is expected to under-perform the 285512AF6. In addition to that, LithiumBank Resources is 1.69 times more volatile than EA 295 15 FEB 51. It trades about -0.26 of its total potential returns per unit of risk. EA 295 15 FEB 51 is currently generating about -0.09 per unit of volatility. If you would invest  6,547  in EA 295 15 FEB 51 on September 5, 2024 and sell it today you would lose (257.00) from holding EA 295 15 FEB 51 or give up 3.93% of portfolio value over 90 days.
Time Period3 Months [change]
DirectionMoves Together 
StrengthSignificant
Accuracy81.82%
ValuesDaily Returns

LithiumBank Resources Corp  vs.  EA 295 15 FEB 51

 Performance 
       Timeline  
LithiumBank Resources 

Risk-Adjusted Performance

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Over the last 90 days LithiumBank Resources Corp has generated negative risk-adjusted returns adding no value to investors with long positions. Despite fragile performance in the last few months, the Stock's forward-looking signals remain nearly stable which may send shares a bit higher in January 2025. The current disturbance may also be a sign of long-run up-swing for the company stockholders.
EA 295 15 

Risk-Adjusted Performance

0 of 100

 
Weak
 
Strong
Very Weak
Over the last 90 days EA 295 15 FEB 51 has generated negative risk-adjusted returns adding no value to investors with long positions. Despite latest uncertain performance, the Bond's basic indicators remain strong and the current disturbance on Wall Street may also be a sign of long term gains for EA 295 15 FEB 51 investors.

LithiumBank Resources and 285512AF6 Volatility Contrast

   Predicted Return Density   
       Returns  

Pair Trading with LithiumBank Resources and 285512AF6

The main advantage of trading using opposite LithiumBank Resources and 285512AF6 positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if LithiumBank Resources position performs unexpectedly, 285512AF6 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 285512AF6 will offset losses from the drop in 285512AF6's long position.
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The idea behind LithiumBank Resources Corp and EA 295 15 FEB 51 pairs trading is to make the combined position market-neutral, meaning the overall market's direction will not affect its win or loss (or potential downside or upside). This can be achieved by designing a pairs trade with two highly correlated stocks or equities that operate in a similar space or sector, making it possible to obtain profits through simple and relatively low-risk investment.
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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 Crypto Correlations module to use cryptocurrency correlation module to diversify your cryptocurrency portfolio across multiple coins.

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