Correlation Between Minerals Technologies and Lithium Americas
Can any of the company-specific risk be diversified away by investing in both Minerals Technologies and Lithium Americas 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 Minerals Technologies and Lithium Americas into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Minerals Technologies and Lithium Americas Corp, you can compare the effects of market volatilities on Minerals Technologies and Lithium Americas 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 Minerals Technologies with a short position of Lithium Americas. Check out your portfolio center. Please also check ongoing floating volatility patterns of Minerals Technologies and Lithium Americas.
Diversification Opportunities for Minerals Technologies and Lithium Americas
0.59 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Minerals and Lithium is 0.59. Overlapping area represents the amount of risk that can be diversified away by holding Minerals Technologies and Lithium Americas Corp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Lithium Americas Corp and Minerals Technologies 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 Minerals Technologies are associated (or correlated) with Lithium Americas. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Lithium Americas Corp has no effect on the direction of Minerals Technologies i.e., Minerals Technologies and Lithium Americas go up and down completely randomly.
Pair Corralation between Minerals Technologies and Lithium Americas
Considering the 90-day investment horizon Minerals Technologies is expected to generate 0.75 times more return on investment than Lithium Americas. However, Minerals Technologies is 1.33 times less risky than Lithium Americas. It trades about 0.17 of its potential returns per unit of risk. Lithium Americas Corp is currently generating about -0.06 per unit of risk. If you would invest 7,600 in Minerals Technologies on September 4, 2024 and sell it today you would earn a total of 660.00 from holding Minerals Technologies or generate 8.68% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Minerals Technologies vs. Lithium Americas Corp
Performance |
| Timeline |
| Minerals Technologies |
| Lithium Americas Corp |
Minerals Technologies and Lithium Americas Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Minerals Technologies and Lithium Americas
The main advantage of trading using opposite Minerals Technologies and Lithium Americas positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Minerals Technologies position performs unexpectedly, Lithium Americas 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 Lithium Americas will offset losses from the drop in Lithium Americas' long position.| Minerals Technologies vs. Innospec | Minerals Technologies vs. Oil Dri | Minerals Technologies vs. H B Fuller | Minerals Technologies vs. Quaker Chemical |
| Lithium Americas vs. Arrow Electronics | Lithium Americas vs. Minerals Technologies | Lithium Americas vs. Pintec Technology Holdings | Lithium Americas vs. Juniata Valley Financial |
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 Portfolio File Import module to quickly import all of your third-party portfolios from your local drive in csv format.
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