Correlation Between Sprott Lithium and Mast Global
Can any of the company-specific risk be diversified away by investing in both Sprott Lithium and Mast Global 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 Sprott Lithium and Mast Global into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Sprott Lithium Miners and Mast Global Battery, you can compare the effects of market volatilities on Sprott Lithium and Mast Global 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 Sprott Lithium with a short position of Mast Global. Check out your portfolio center. Please also check ongoing floating volatility patterns of Sprott Lithium and Mast Global.
Diversification Opportunities for Sprott Lithium and Mast Global
0.8 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between Sprott and Mast is 0.8. Overlapping area represents the amount of risk that can be diversified away by holding Sprott Lithium Miners and Mast Global Battery in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Mast Global Battery and Sprott 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 Sprott Lithium Miners are associated (or correlated) with Mast Global. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Mast Global Battery has no effect on the direction of Sprott Lithium i.e., Sprott Lithium and Mast Global go up and down completely randomly.
Pair Corralation between Sprott Lithium and Mast Global
Given the investment horizon of 90 days Sprott Lithium Miners is expected to generate 1.94 times more return on investment than Mast Global. However, Sprott Lithium is 1.94 times more volatile than Mast Global Battery. It trades about 0.12 of its potential returns per unit of risk. Mast Global Battery is currently generating about 0.1 per unit of risk. If you would invest 663.00 in Sprott Lithium Miners on September 2, 2024 and sell it today you would earn a total of 174.00 from holding Sprott Lithium Miners or generate 26.24% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Sprott Lithium Miners vs. Mast Global Battery
Performance |
| Timeline |
| Sprott Lithium Miners |
| Mast Global Battery |
Sprott Lithium and Mast Global Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Sprott Lithium and Mast Global
The main advantage of trading using opposite Sprott Lithium and Mast Global positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Sprott Lithium position performs unexpectedly, Mast Global 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 Mast Global will offset losses from the drop in Mast Global's long position.| Sprott Lithium vs. Sprott Energy Transition | Sprott Lithium vs. Sprott Junior Copper | Sprott Lithium vs. Sprott Junior Uranium | Sprott Lithium vs. Sprott Nickel Miners |
| Mast Global vs. Freedom Day Dividend | Mast Global vs. iShares MSCI China | Mast Global vs. iShares Dividend and | Mast Global vs. SmartETFs Dividend Builder |
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 Earnings Calls module to check upcoming earnings announcements updated hourly across public exchanges.
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