Correlation Between Frontier Lithium and Winsome Resources
Can any of the company-specific risk be diversified away by investing in both Frontier Lithium and Winsome 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 Winsome 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 Winsome Resources Limited, you can compare the effects of market volatilities on Frontier Lithium and Winsome 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 Winsome Resources. Check out your portfolio center. Please also check ongoing floating volatility patterns of Frontier Lithium and Winsome Resources.
Diversification Opportunities for Frontier Lithium and Winsome Resources
-0.09 | Correlation Coefficient |
Good diversification
The 3 months correlation between Frontier and Winsome is -0.09. Overlapping area represents the amount of risk that can be diversified away by holding Frontier Lithium and Winsome Resources Limited in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Winsome 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 Winsome Resources. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Winsome Resources has no effect on the direction of Frontier Lithium i.e., Frontier Lithium and Winsome Resources go up and down completely randomly.
Pair Corralation between Frontier Lithium and Winsome Resources
Assuming the 90 days horizon Frontier Lithium is expected to generate 1.11 times more return on investment than Winsome Resources. However, Frontier Lithium is 1.11 times more volatile than Winsome Resources Limited. It trades about -0.07 of its potential returns per unit of risk. Winsome Resources Limited is currently generating about -0.31 per unit of risk. If you would invest 41.00 in Frontier Lithium on September 1, 2024 and sell it today you would lose (4.00) from holding Frontier Lithium or give up 9.76% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Frontier Lithium vs. Winsome Resources Limited
Performance |
| Timeline |
| Frontier Lithium |
| Winsome Resources |
Frontier Lithium and Winsome Resources Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Frontier Lithium and Winsome Resources
The main advantage of trading using opposite Frontier Lithium and Winsome Resources positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Frontier Lithium position performs unexpectedly, Winsome 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 Winsome Resources will offset losses from the drop in Winsome Resources' long position.| Frontier Lithium vs. Vision Lithium | Frontier Lithium vs. Critical Elements | Frontier Lithium vs. Cypress Development Corp | Frontier Lithium vs. Core Lithium |
| Winsome Resources vs. Legacy Education | Winsome Resources vs. Apple Inc | Winsome Resources vs. NVIDIA | Winsome Resources vs. Microsoft |
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 My Watchlist Analysis module to analyze my current watchlist and to refresh optimization strategy. Macroaxis watchlist is based on self-learning algorithm to remember stocks you like.
Other Complementary Tools
| Balance Of Power Check stock momentum by analyzing Balance Of Power indicator and other technical ratios | |
| Global Correlations Find global opportunities by holding instruments from different markets | |
| Pattern Recognition Use different Pattern Recognition models to time the market across multiple global exchanges | |
| Options Analysis Analyze and evaluate options and option chains as a potential hedge for your portfolios | |
| Technical Analysis Check basic technical indicators and analysis based on most latest market data |