Correlation Between Lithium Power and International Lithium
Can any of the company-specific risk be diversified away by investing in both Lithium Power and International Lithium 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 International Lithium 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 International Lithium Corp, you can compare the effects of market volatilities on Lithium Power and International Lithium 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 International Lithium. Check out your portfolio center. Please also check ongoing floating volatility patterns of Lithium Power and International Lithium.
Diversification Opportunities for Lithium Power and International Lithium
0.11 | Correlation Coefficient |
Average diversification
The 3 months correlation between Lithium and International is 0.11. Overlapping area represents the amount of risk that can be diversified away by holding Lithium Power International and International Lithium Corp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on International Lithium 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 International Lithium. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of International Lithium has no effect on the direction of Lithium Power i.e., Lithium Power and International Lithium go up and down completely randomly.
Pair Corralation between Lithium Power and International Lithium
Assuming the 90 days horizon Lithium Power International is expected to under-perform the International Lithium. But the pink sheet apears to be less risky and, when comparing its historical volatility, Lithium Power International is 1.4 times less risky than International Lithium. The pink sheet trades about -0.01 of its potential returns per unit of risk. The International Lithium Corp is currently generating about 0.01 of returns per unit of risk over similar time horizon. If you would invest 3.90 in International Lithium Corp on September 1, 2024 and sell it today you would lose (2.55) from holding International Lithium Corp or give up 65.38% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 31.11% |
| Values | Daily Returns |
Lithium Power International vs. International Lithium Corp
Performance |
| Timeline |
| Lithium Power Intern |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Very Weak
| International Lithium |
Lithium Power and International Lithium Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Lithium Power and International Lithium
The main advantage of trading using opposite Lithium Power and International Lithium positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Lithium Power position performs unexpectedly, International Lithium 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 International Lithium will offset losses from the drop in International Lithium's 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 |
| International Lithium vs. Decade Resources | International Lithium vs. Silver Spruce Resources | International Lithium vs. Grid Metals Corp | International Lithium vs. Canada Rare Earth |
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 Piotroski F Score module to get Piotroski F Score based on the binary analysis strategy of nine different fundamentals.
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