Correlation Between Lithium Ionic and Lithium Power
Can any of the company-specific risk be diversified away by investing in both Lithium Ionic and Lithium Power 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 Lithium Power 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 Lithium Power International, you can compare the effects of market volatilities on Lithium Ionic and Lithium Power 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 Lithium Power. Check out your portfolio center. Please also check ongoing floating volatility patterns of Lithium Ionic and Lithium Power.
Diversification Opportunities for Lithium Ionic and Lithium Power
-0.24 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Lithium and Lithium is -0.24. Overlapping area represents the amount of risk that can be diversified away by holding Lithium Ionic Corp and Lithium Power International in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Lithium Power Intern 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 Lithium Power. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Lithium Power Intern has no effect on the direction of Lithium Ionic i.e., Lithium Ionic and Lithium Power go up and down completely randomly.
Pair Corralation between Lithium Ionic and Lithium Power
If you would invest 74.00 in Lithium Ionic Corp on August 25, 2024 and sell it today you would lose (11.00) from holding Lithium Ionic Corp or give up 14.86% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 0.79% |
| Values | Daily Returns |
Lithium Ionic Corp vs. Lithium Power International
Performance |
| Timeline |
| Lithium Ionic Corp |
| Lithium Power Intern |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Very Weak
Lithium Ionic and Lithium Power Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Lithium Ionic and Lithium Power
The main advantage of trading using opposite Lithium Ionic and Lithium Power positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Lithium Ionic position performs unexpectedly, Lithium Power 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 Lithium Power will offset losses from the drop in Lithium Power's long position.| Lithium Ionic vs. Norra Metals Corp | Lithium Ionic vs. ZincX Resources Corp | Lithium Ionic vs. Nuinsco Resources Limited | Lithium Ionic vs. South Star Battery |
| Lithium Power vs. Macmahon Holdings Limited | Lithium Power vs. Rokmaster Resources Corp | Lithium Power vs. Hudson Resources | Lithium Power vs. Thunder Gold 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 Analyst Advice module to analyst recommendations and target price estimates broken down by several categories.
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