Correlation Between US Lithium and Lobe Sciences
Can any of the company-specific risk be diversified away by investing in both US Lithium and Lobe Sciences 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 Lobe Sciences 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 Lobe Sciences, you can compare the effects of market volatilities on US Lithium and Lobe Sciences 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 Lobe Sciences. Check out your portfolio center. Please also check ongoing floating volatility patterns of US Lithium and Lobe Sciences.
Diversification Opportunities for US Lithium and Lobe Sciences
0.0 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between LITH and Lobe is 0.0. Overlapping area represents the amount of risk that can be diversified away by holding US Lithium Corp and Lobe Sciences in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Lobe Sciences 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 Lobe Sciences. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Lobe Sciences has no effect on the direction of US Lithium i.e., US Lithium and Lobe Sciences go up and down completely randomly.
Pair Corralation between US Lithium and Lobe Sciences
If you would invest 1.29 in Lobe Sciences on August 25, 2024 and sell it today you would lose (0.04) from holding Lobe Sciences or give up 3.1% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Flat |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
US Lithium Corp vs. Lobe Sciences
Performance |
| Timeline |
| US Lithium Corp |
| Lobe Sciences |
US Lithium and Lobe Sciences Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with US Lithium and Lobe Sciences
The main advantage of trading using opposite US Lithium and Lobe Sciences positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if US Lithium position performs unexpectedly, Lobe Sciences 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 Lobe Sciences will offset losses from the drop in Lobe Sciences' long position.| US Lithium vs. Capricor Therapeutics | US Lithium vs. Akari Therapeutics PLC | US Lithium vs. Soleno Therapeutics | US Lithium vs. Bio Path Holdings |
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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 Sectors module to list of equity sectors categorizing publicly traded companies based on their primary business activities.
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