Correlation Between US Lithium and Global Hemp
Can any of the company-specific risk be diversified away by investing in both US Lithium and Global Hemp 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 Global Hemp 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 Global Hemp Group, you can compare the effects of market volatilities on US Lithium and Global Hemp 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 Global Hemp. Check out your portfolio center. Please also check ongoing floating volatility patterns of US Lithium and Global Hemp.
Diversification Opportunities for US Lithium and Global Hemp
0.0 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between LITH and Global is 0.0. Overlapping area represents the amount of risk that can be diversified away by holding US Lithium Corp and Global Hemp Group in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Global Hemp Group 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 Global Hemp. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Global Hemp Group has no effect on the direction of US Lithium i.e., US Lithium and Global Hemp go up and down completely randomly.
Pair Corralation between US Lithium and Global Hemp
If you would invest 1.80 in Global Hemp Group on August 29, 2024 and sell it today you would lose (0.34) from holding Global Hemp Group or give up 18.89% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Flat |
| Strength | Insignificant |
| Accuracy | 99.6% |
| Values | Daily Returns |
US Lithium Corp vs. Global Hemp Group
Performance |
| Timeline |
| US Lithium Corp |
| Global Hemp Group |
US Lithium and Global Hemp Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with US Lithium and Global Hemp
The main advantage of trading using opposite US Lithium and Global Hemp positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if US Lithium position performs unexpectedly, Global Hemp 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 Global Hemp will offset losses from the drop in Global Hemp's long position.| US Lithium vs. Mc Endvrs | US Lithium vs. Kali Inc | US Lithium vs. One World Pharma | US Lithium vs. HempAmericana |
| Global Hemp vs. Greater Cannabis | Global Hemp vs. Cannabis Suisse Corp | Global Hemp vs. Maple Leaf Green | Global Hemp vs. Mc Endvrs |
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 Funds Screener module to find actively-traded funds from around the world traded on over 30 global exchanges.
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