Correlation Between Liontown Resources and First American
Can any of the company-specific risk be diversified away by investing in both Liontown Resources and First American 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 Liontown Resources and First American into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Liontown Resources Limited and First American Silver, you can compare the effects of market volatilities on Liontown Resources and First American 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 Liontown Resources with a short position of First American. Check out your portfolio center. Please also check ongoing floating volatility patterns of Liontown Resources and First American.
Diversification Opportunities for Liontown Resources and First American
0.0 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between Liontown and First is 0.0. Overlapping area represents the amount of risk that can be diversified away by holding Liontown Resources Limited and First American Silver in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on First American Silver and Liontown 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 Liontown Resources Limited are associated (or correlated) with First American. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of First American Silver has no effect on the direction of Liontown Resources i.e., Liontown Resources and First American go up and down completely randomly.
Pair Corralation between Liontown Resources and First American
If you would invest 0.01 in First American Silver on August 31, 2024 and sell it today you would earn a total of 0.00 from holding First American Silver or generate 0.0% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Flat |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Liontown Resources Limited vs. First American Silver
Performance |
| Timeline |
| Liontown Resources |
| First American Silver |
Liontown Resources and First American Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Liontown Resources and First American
The main advantage of trading using opposite Liontown Resources and First American positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Liontown Resources position performs unexpectedly, First American 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 First American will offset losses from the drop in First American's long position.| Liontown Resources vs. Sayona Mining Limited | Liontown Resources vs. Core Lithium | Liontown Resources vs. Critical Elements | Liontown Resources vs. South32 ADR |
| First American vs. Liontown Resources Limited | First American vs. ATT Inc | First American vs. Merck Company | First American vs. Walt Disney |
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 Headlines Timeline module to stay connected to all market stories and filter out noise. Drill down to analyze hype elasticity.
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