Correlation Between Lithium Ionic and Oroco Resource
Can any of the company-specific risk be diversified away by investing in both Lithium Ionic and Oroco Resource 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 Oroco Resource 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 Oroco Resource Corp, you can compare the effects of market volatilities on Lithium Ionic and Oroco Resource 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 Oroco Resource. Check out your portfolio center. Please also check ongoing floating volatility patterns of Lithium Ionic and Oroco Resource.
Diversification Opportunities for Lithium Ionic and Oroco Resource
0.04 | Correlation Coefficient |
Significant diversification
The 3 months correlation between Lithium and Oroco is 0.04. Overlapping area represents the amount of risk that can be diversified away by holding Lithium Ionic Corp and Oroco Resource Corp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Oroco Resource Corp 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 Oroco Resource. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Oroco Resource Corp has no effect on the direction of Lithium Ionic i.e., Lithium Ionic and Oroco Resource go up and down completely randomly.
Pair Corralation between Lithium Ionic and Oroco Resource
Assuming the 90 days horizon Lithium Ionic Corp is expected to generate 1.3 times more return on investment than Oroco Resource. However, Lithium Ionic is 1.3 times more volatile than Oroco Resource Corp. It trades about -0.02 of its potential returns per unit of risk. Oroco Resource Corp is currently generating about -0.03 per unit of risk. If you would invest 120.00 in Lithium Ionic Corp on August 25, 2024 and sell it today you would lose (57.00) from holding Lithium Ionic Corp or give up 47.5% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Lithium Ionic Corp vs. Oroco Resource Corp
Performance |
| Timeline |
| Lithium Ionic Corp |
| Oroco Resource Corp |
Lithium Ionic and Oroco Resource Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Lithium Ionic and Oroco Resource
The main advantage of trading using opposite Lithium Ionic and Oroco Resource positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Lithium Ionic position performs unexpectedly, Oroco Resource 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 Oroco Resource will offset losses from the drop in Oroco Resource's long position.| Lithium Ionic vs. Norra Metals Corp | Lithium Ionic vs. Amarc Resources | Lithium Ionic vs. ZincX Resources Corp | Lithium Ionic vs. Nuinsco Resources Limited |
| Oroco Resource vs. Ascendant Resources | Oroco Resource vs. Cantex Mine Development | Oroco Resource vs. Amarc Resources | Oroco Resource vs. Sterling Metals 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 Fundamental Analysis module to view fundamental data based on most recent published financial statements.
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