Correlation Between Lithium Ionic and Giga Metals
Can any of the company-specific risk be diversified away by investing in both Lithium Ionic and Giga Metals 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 Giga Metals 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 Giga Metals, you can compare the effects of market volatilities on Lithium Ionic and Giga Metals 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 Giga Metals. Check out your portfolio center. Please also check ongoing floating volatility patterns of Lithium Ionic and Giga Metals.
Diversification Opportunities for Lithium Ionic and Giga Metals
-0.44 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Lithium and Giga is -0.44. Overlapping area represents the amount of risk that can be diversified away by holding Lithium Ionic Corp and Giga Metals in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Giga Metals 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 Giga Metals. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Giga Metals has no effect on the direction of Lithium Ionic i.e., Lithium Ionic and Giga Metals go up and down completely randomly.
Pair Corralation between Lithium Ionic and Giga Metals
Assuming the 90 days horizon Lithium Ionic Corp is expected to under-perform the Giga Metals. In addition to that, Lithium Ionic is 1.23 times more volatile than Giga Metals. It trades about -0.03 of its total potential returns per unit of risk. Giga Metals is currently generating about -0.02 per unit of volatility. If you would invest 21.00 in Giga Metals on August 29, 2024 and sell it today you would lose (2.00) from holding Giga Metals or give up 9.52% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 13.49% |
| Values | Daily Returns |
Lithium Ionic Corp vs. Giga Metals
Performance |
| Timeline |
| Lithium Ionic Corp |
| Giga Metals |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Very Weak
Lithium Ionic and Giga Metals Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Lithium Ionic and Giga Metals
The main advantage of trading using opposite Lithium Ionic and Giga Metals positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Lithium Ionic position performs unexpectedly, Giga Metals 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 Giga Metals will offset losses from the drop in Giga Metals' 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 |
| Giga Metals vs. Canada Nickel | Giga Metals vs. Giga Metals Corp | Giga Metals vs. Talon Metals Corp | Giga Metals vs. FPX Nickel Corp |
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 Portfolio Diagnostics module to use generated alerts and portfolio events aggregator to diagnose current holdings.
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