Correlation Between Lithium Power and Base Resources
Can any of the company-specific risk be diversified away by investing in both Lithium Power and Base Resources 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 Power and Base Resources into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Lithium Power International and Base Resources Limited, you can compare the effects of market volatilities on Lithium Power and Base Resources 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 Power with a short position of Base Resources. Check out your portfolio center. Please also check ongoing floating volatility patterns of Lithium Power and Base Resources.
Diversification Opportunities for Lithium Power and Base Resources
0.06 | Correlation Coefficient |
Significant diversification
The 3 months correlation between Lithium and Base is 0.06. Overlapping area represents the amount of risk that can be diversified away by holding Lithium Power International and Base Resources Limited in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Base Resources and Lithium Power 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 Power International are associated (or correlated) with Base Resources. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Base Resources has no effect on the direction of Lithium Power i.e., Lithium Power and Base Resources go up and down completely randomly.
Pair Corralation between Lithium Power and Base Resources
If you would invest 20.00 in Base Resources Limited on August 29, 2024 and sell it today you would earn a total of 0.00 from holding Base Resources Limited or generate 0.0% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Lithium Power International vs. Base Resources Limited
Performance |
| Timeline |
| Lithium Power Intern |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Very Weak
| Base Resources |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Solid
Lithium Power and Base Resources Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Lithium Power and Base Resources
The main advantage of trading using opposite Lithium Power and Base Resources positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Lithium Power position performs unexpectedly, Base Resources 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 Base Resources will offset losses from the drop in Base Resources' long position.| Lithium Power vs. Macmahon Holdings Limited | Lithium Power vs. Rokmaster Resources Corp | Lithium Power vs. Hudson Resources | Lithium Power vs. Thunder Gold Corp |
| Base Resources vs. Macmahon Holdings Limited | Base Resources vs. Rokmaster Resources Corp | Base Resources vs. Hudson Resources | Base Resources 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 Economic Indicators module to top statistical indicators that provide insights into how an economy is performing.
Other Complementary Tools
| Portfolio Manager State of the art Portfolio Manager to monitor and improve performance of your invested capital | |
| Analyst Advice Analyst recommendations and target price estimates broken down by several categories | |
| Share Portfolio Track or share privately all of your investments from the convenience of any device | |
| Companies Directory Evaluate performance of over 100,000 Stocks, Funds, and ETFs against different fundamentals | |
| Global Markets Map Get a quick overview of global market snapshot using zoomable world map. Drill down to check world indexes |