Correlation Between Lifezone Metals and Nouveau Monde
Can any of the company-specific risk be diversified away by investing in both Lifezone Metals and Nouveau Monde 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 Lifezone Metals and Nouveau Monde into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Lifezone Metals Limited and Nouveau Monde Graphite, you can compare the effects of market volatilities on Lifezone Metals and Nouveau Monde 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 Lifezone Metals with a short position of Nouveau Monde. Check out your portfolio center. Please also check ongoing floating volatility patterns of Lifezone Metals and Nouveau Monde.
Diversification Opportunities for Lifezone Metals and Nouveau Monde
-0.35 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Lifezone and Nouveau is -0.35. Overlapping area represents the amount of risk that can be diversified away by holding Lifezone Metals Limited and Nouveau Monde Graphite in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Nouveau Monde Graphite and Lifezone Metals 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 Lifezone Metals Limited are associated (or correlated) with Nouveau Monde. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Nouveau Monde Graphite has no effect on the direction of Lifezone Metals i.e., Lifezone Metals and Nouveau Monde go up and down completely randomly.
Pair Corralation between Lifezone Metals and Nouveau Monde
Considering the 90-day investment horizon Lifezone Metals Limited is expected to generate 1.27 times more return on investment than Nouveau Monde. However, Lifezone Metals is 1.27 times more volatile than Nouveau Monde Graphite. It trades about -0.01 of its potential returns per unit of risk. Nouveau Monde Graphite is currently generating about -0.06 per unit of risk. If you would invest 1,003 in Lifezone Metals Limited on August 27, 2024 and sell it today you would lose (320.00) from holding Lifezone Metals Limited or give up 31.9% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Lifezone Metals Limited vs. Nouveau Monde Graphite
Performance |
| Timeline |
| Lifezone Metals |
| Nouveau Monde Graphite |
Lifezone Metals and Nouveau Monde Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Lifezone Metals and Nouveau Monde
The main advantage of trading using opposite Lifezone Metals and Nouveau Monde positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Lifezone Metals position performs unexpectedly, Nouveau Monde 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 Nouveau Monde will offset losses from the drop in Nouveau Monde's long position.| Lifezone Metals vs. Vale SA ADR | Lifezone Metals vs. Teck Resources Ltd | Lifezone Metals vs. MP Materials Corp | Lifezone Metals vs. BHP Group Limited |
| Nouveau Monde vs. Mason Graphite | Nouveau Monde vs. Northern Graphite | Nouveau Monde vs. Graphite One | Nouveau Monde vs. Lomiko Metals |
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 Investing Opportunities module to build portfolios using our predefined set of ideas and optimize them against your investing preferences.
Other Complementary Tools
| ETF Categories List of ETF categories grouped based on various criteria, such as the investment strategy or type of investments | |
| Portfolio Comparator Compare the composition, asset allocations and performance of any two portfolios in your account | |
| Equity Analysis Research over 250,000 global equities including funds, stocks and ETFs to find investment opportunities | |
| Stocks Directory Find actively traded stocks across global markets | |
| Portfolio Optimization Compute new portfolio that will generate highest expected return given your specified tolerance for risk |