Correlation Between US Lithium and Dow Jones
Can any of the company-specific risk be diversified away by investing in both US Lithium and Dow Jones 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 US Lithium and Dow Jones into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between US Lithium Corp and Dow Jones Industrial, you can compare the effects of market volatilities on US Lithium and Dow Jones 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 US Lithium with a short position of Dow Jones. Check out your portfolio center. Please also check ongoing floating volatility patterns of US Lithium and Dow Jones.
Diversification Opportunities for US Lithium and Dow Jones
0.0 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between LITH and Dow is 0.0. Overlapping area represents the amount of risk that can be diversified away by holding US Lithium Corp and Dow Jones Industrial in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Dow Jones Industrial and US Lithium 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 US Lithium Corp are associated (or correlated) with Dow Jones. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Dow Jones Industrial has no effect on the direction of US Lithium i.e., US Lithium and Dow Jones go up and down completely randomly.
Pair Corralation between US Lithium and Dow Jones
If you would invest 4,251,495 in Dow Jones Industrial on August 24, 2024 and sell it today you would earn a total of 135,540 from holding Dow Jones Industrial or generate 3.19% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Flat |
| Strength | Insignificant |
| Accuracy | 95.65% |
| Values | Daily Returns |
US Lithium Corp vs. Dow Jones Industrial
Performance |
| Timeline |
US Lithium and Dow Jones Volatility Contrast
Predicted Return Density |
| Returns |
US Lithium Corp
Pair trading matchups for US Lithium
Dow Jones Industrial
Pair trading matchups for Dow Jones
Pair Trading with US Lithium and Dow Jones
The main advantage of trading using opposite US Lithium and Dow Jones positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if US Lithium position performs unexpectedly, Dow Jones 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 Dow Jones will offset losses from the drop in Dow Jones' long position.| US Lithium vs. Mc Endvrs | US Lithium vs. Kali Inc | US Lithium vs. One World Pharma | US Lithium vs. HempAmericana |
| Dow Jones vs. Sphere Entertainment Co | Dow Jones vs. Perseus Mining Limited | Dow Jones vs. Titan Machinery | Dow Jones vs. Simon Property Group |
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 Positions Ratings module to determine portfolio positions ratings based on digital equity recommendations. Macroaxis instant position ratings are based on combination of fundamental analysis and risk-adjusted market performance.
Other Complementary Tools
| Bollinger Bands Use Bollinger Bands indicator to analyze target price for a given investing horizon | |
| Stock Tickers Use high-impact, comprehensive, and customizable stock tickers that can be easily integrated to any websites | |
| Idea Optimizer Use advanced portfolio builder with pre-computed micro ideas to build optimal portfolio | |
| Equity Valuation Check real value of public entities based on technical and fundamental data | |
| Investing Opportunities Build portfolios using our predefined set of ideas and optimize them against your investing preferences |