Correlation Between Frontier Lithium and Tinka Resources
Can any of the company-specific risk be diversified away by investing in both Frontier Lithium and Tinka Resources 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 Frontier Lithium and Tinka Resources into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Frontier Lithium and Tinka Resources Limited, you can compare the effects of market volatilities on Frontier Lithium and Tinka Resources 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 Frontier Lithium with a short position of Tinka Resources. Check out your portfolio center. Please also check ongoing floating volatility patterns of Frontier Lithium and Tinka Resources.
Diversification Opportunities for Frontier Lithium and Tinka Resources
0.67 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Frontier and Tinka is 0.67. Overlapping area represents the amount of risk that can be diversified away by holding Frontier Lithium and Tinka Resources Limited in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Tinka Resources and Frontier 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 Frontier Lithium are associated (or correlated) with Tinka Resources. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Tinka Resources has no effect on the direction of Frontier Lithium i.e., Frontier Lithium and Tinka Resources go up and down completely randomly.
Pair Corralation between Frontier Lithium and Tinka Resources
Assuming the 90 days horizon Frontier Lithium is expected to under-perform the Tinka Resources. But the otc stock apears to be less risky and, when comparing its historical volatility, Frontier Lithium is 1.3 times less risky than Tinka Resources. The otc stock trades about -0.04 of its potential returns per unit of risk. The Tinka Resources Limited is currently generating about 0.01 of returns per unit of risk over similar time horizon. If you would invest 11.00 in Tinka Resources Limited on August 29, 2024 and sell it today you would lose (4.00) from holding Tinka Resources Limited or give up 36.36% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Frontier Lithium vs. Tinka Resources Limited
Performance |
| Timeline |
| Frontier Lithium |
| Tinka Resources |
Frontier Lithium and Tinka Resources Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Frontier Lithium and Tinka Resources
The main advantage of trading using opposite Frontier Lithium and Tinka Resources positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Frontier Lithium position performs unexpectedly, Tinka Resources 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 Tinka Resources will offset losses from the drop in Tinka Resources' long position.| Frontier Lithium vs. Vision Lithium | Frontier Lithium vs. Critical Elements | Frontier Lithium vs. Cypress Development Corp | Frontier Lithium vs. Core Lithium |
| Tinka Resources vs. Silver Hammer Mining | Tinka Resources vs. Reyna Silver Corp | Tinka Resources vs. Guanajuato Silver | Tinka Resources vs. Silver One Resources |
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 Pattern Recognition module to use different Pattern Recognition models to time the market across multiple global exchanges.
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