Correlation Between Lithium South and Exro Technologies
Can any of the company-specific risk be diversified away by investing in both Lithium South and Exro Technologies 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 South and Exro Technologies into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Lithium South Development and Exro Technologies, you can compare the effects of market volatilities on Lithium South and Exro Technologies 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 South with a short position of Exro Technologies. Check out your portfolio center. Please also check ongoing floating volatility patterns of Lithium South and Exro Technologies.
Diversification Opportunities for Lithium South and Exro Technologies
0.42 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Lithium and Exro is 0.42. Overlapping area represents the amount of risk that can be diversified away by holding Lithium South Development and Exro Technologies in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Exro Technologies and Lithium South 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 South Development are associated (or correlated) with Exro Technologies. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Exro Technologies has no effect on the direction of Lithium South i.e., Lithium South and Exro Technologies go up and down completely randomly.
Pair Corralation between Lithium South and Exro Technologies
Assuming the 90 days horizon Lithium South Development is expected to generate 0.95 times more return on investment than Exro Technologies. However, Lithium South Development is 1.05 times less risky than Exro Technologies. It trades about -0.04 of its potential returns per unit of risk. Exro Technologies is currently generating about -0.07 per unit of risk. If you would invest 52.00 in Lithium South Development on August 31, 2024 and sell it today you would lose (42.00) from holding Lithium South Development or give up 80.77% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 99.79% |
| Values | Daily Returns |
Lithium South Development vs. Exro Technologies
Performance |
| Timeline |
| Lithium South Development |
| Exro Technologies |
Lithium South and Exro Technologies Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Lithium South and Exro Technologies
The main advantage of trading using opposite Lithium South and Exro Technologies positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Lithium South position performs unexpectedly, Exro Technologies 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 Exro Technologies will offset losses from the drop in Exro Technologies' long position.| Lithium South vs. Solar Alliance Energy | Lithium South vs. Global X Active | Lithium South vs. Financial 15 Split | Lithium South vs. Rubicon Organics |
| Exro Technologies vs. Nano One Materials | Exro Technologies vs. Greenlane Renewables | Exro Technologies vs. PyroGenesis Canada | Exro Technologies vs. Vicinity Motor 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 Exposure Probability module to analyze equity upside and downside potential for a given time horizon across multiple markets.
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