Correlation Between Lithium Ionic and Ardiden
Can any of the company-specific risk be diversified away by investing in both Lithium Ionic and Ardiden 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 Lithium Ionic and Ardiden into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Lithium Ionic Corp and Ardiden Limited, you can compare the effects of market volatilities on Lithium Ionic and Ardiden 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 Lithium Ionic with a short position of Ardiden. Check out your portfolio center. Please also check ongoing floating volatility patterns of Lithium Ionic and Ardiden.
Diversification Opportunities for Lithium Ionic and Ardiden
-0.31 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Lithium and Ardiden is -0.31. Overlapping area represents the amount of risk that can be diversified away by holding Lithium Ionic Corp and Ardiden Limited in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Ardiden Limited and Lithium Ionic 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 Lithium Ionic Corp are associated (or correlated) with Ardiden. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Ardiden Limited has no effect on the direction of Lithium Ionic i.e., Lithium Ionic and Ardiden go up and down completely randomly.
Pair Corralation between Lithium Ionic and Ardiden
Assuming the 90 days horizon Lithium Ionic Corp is expected to under-perform the Ardiden. But the otc stock apears to be less risky and, when comparing its historical volatility, Lithium Ionic Corp is 12.57 times less risky than Ardiden. The otc stock trades about 0.0 of its potential returns per unit of risk. The Ardiden Limited is currently generating about 0.06 of returns per unit of risk over similar time horizon. If you would invest 0.40 in Ardiden Limited on September 4, 2024 and sell it today you would earn a total of 4.60 from holding Ardiden Limited or generate 1150.0% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 99.8% |
| Values | Daily Returns |
Lithium Ionic Corp vs. Ardiden Limited
Performance |
| Timeline |
| Lithium Ionic Corp |
| Ardiden Limited |
Lithium Ionic and Ardiden Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Lithium Ionic and Ardiden
The main advantage of trading using opposite Lithium Ionic and Ardiden positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Lithium Ionic position performs unexpectedly, Ardiden 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 Ardiden will offset losses from the drop in Ardiden's long position.| Lithium Ionic vs. IGO Limited | Lithium Ionic vs. Grid Metals Corp | Lithium Ionic vs. First American Silver | Lithium Ionic vs. Qubec Nickel Corp |
| Ardiden vs. Qubec Nickel Corp | Ardiden vs. IGO Limited | Ardiden vs. Avarone Metals | Ardiden vs. Adriatic Metals PLC |
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 Price Exposure Probability module to analyze equity upside and downside potential for a given time horizon across multiple markets.
Other Complementary Tools
| Insider Screener Find insiders across different sectors to evaluate their impact on performance | |
| Volatility Analysis Get historical volatility and risk analysis based on latest market data | |
| Aroon Oscillator Analyze current equity momentum using Aroon Oscillator and other momentum ratios | |
| Competition Analyzer Analyze and compare many basic indicators for a group of related or unrelated entities | |
| Alpha Finder Use alpha and beta coefficients to find investment opportunities after accounting for the risk |