Correlation Between Lithium Power and Silver Spruce
Can any of the company-specific risk be diversified away by investing in both Lithium Power and Silver Spruce 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 Silver Spruce 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 Silver Spruce Resources, you can compare the effects of market volatilities on Lithium Power and Silver Spruce 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 Silver Spruce. Check out your portfolio center. Please also check ongoing floating volatility patterns of Lithium Power and Silver Spruce.
Diversification Opportunities for Lithium Power and Silver Spruce
-0.07 | Correlation Coefficient |
Good diversification
The 3 months correlation between Lithium and Silver is -0.07. Overlapping area represents the amount of risk that can be diversified away by holding Lithium Power International and Silver Spruce Resources in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Silver Spruce 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 Silver Spruce. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Silver Spruce Resources has no effect on the direction of Lithium Power i.e., Lithium Power and Silver Spruce go up and down completely randomly.
Pair Corralation between Lithium Power and Silver Spruce
If you would invest 22.00 in Lithium Power International on August 28, 2024 and sell it today you would earn a total of 0.00 from holding Lithium Power International or generate 0.0% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 4.76% |
| Values | Daily Returns |
Lithium Power International vs. Silver Spruce Resources
Performance |
| Timeline |
| Lithium Power Intern |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Very Weak
| Silver Spruce Resources |
Lithium Power and Silver Spruce Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Lithium Power and Silver Spruce
The main advantage of trading using opposite Lithium Power and Silver Spruce positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Lithium Power position performs unexpectedly, Silver Spruce 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 Silver Spruce will offset losses from the drop in Silver Spruce'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 |
| Silver Spruce vs. Golden Goliath Resources | Silver Spruce vs. Portofino Resources | Silver Spruce vs. Freegold Ventures Limited | Silver Spruce vs. Bravada Gold |
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 Correlation Analysis module to reduce portfolio risk simply by holding instruments which are not perfectly correlated.
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