Correlation Between Lithium Energi and Foraco International
Can any of the company-specific risk be diversified away by investing in both Lithium Energi and Foraco International 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 Lithium Energi and Foraco International into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Lithium Energi Exploration and Foraco International SA, you can compare the effects of market volatilities on Lithium Energi and Foraco International 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 Lithium Energi with a short position of Foraco International. Check out your portfolio center. Please also check ongoing floating volatility patterns of Lithium Energi and Foraco International.
Diversification Opportunities for Lithium Energi and Foraco International
0.1 | Correlation Coefficient |
Average diversification
The 3 months correlation between Lithium and Foraco is 0.1. Overlapping area represents the amount of risk that can be diversified away by holding Lithium Energi Exploration and Foraco International SA in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Foraco International and Lithium Energi 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 Lithium Energi Exploration are associated (or correlated) with Foraco International. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Foraco International has no effect on the direction of Lithium Energi i.e., Lithium Energi and Foraco International go up and down completely randomly.
Pair Corralation between Lithium Energi and Foraco International
Assuming the 90 days trading horizon Lithium Energi Exploration is expected to generate 1.73 times more return on investment than Foraco International. However, Lithium Energi is 1.73 times more volatile than Foraco International SA. It trades about -0.06 of its potential returns per unit of risk. Foraco International SA is currently generating about -0.16 per unit of risk. If you would invest 3.00 in Lithium Energi Exploration on December 4, 2024 and sell it today you would lose (0.50) from holding Lithium Energi Exploration or give up 16.67% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Lithium Energi Exploration vs. Foraco International SA
Performance |
| Timeline |
| Lithium Energi Explo |
| Foraco International |
Lithium Energi and Foraco International Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Lithium Energi and Foraco International
The main advantage of trading using opposite Lithium Energi and Foraco International positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Lithium Energi position performs unexpectedly, Foraco International 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 Foraco International will offset losses from the drop in Foraco International's long position.| Lithium Energi vs. Portofino Resources | Lithium Energi vs. Pacific Imperial Mines | Lithium Energi vs. Rackla Metals | Lithium Energi vs. PJX Resources |
| Foraco International vs. Orbit Garant Drilling | Foraco International vs. Geodrill Limited | Foraco International vs. Mccoy Global | Foraco International vs. Bri Chem 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 Price Ceiling Movement module to calculate and plot Price Ceiling Movement for different equity instruments.
Other Complementary Tools
| Portfolio Analyzer Portfolio analysis module that provides access to portfolio diagnostics and optimization engine | |
| Global Correlations Find global opportunities by holding instruments from different markets | |
| Share Portfolio Track or share privately all of your investments from the convenience of any device | |
| Technical Analysis Check basic technical indicators and analysis based on most latest market data | |
| Fundamental Analysis View fundamental data based on most recent published financial statements |