Correlation Between NioCorp Developments and Standard Lithium
Can any of the company-specific risk be diversified away by investing in both NioCorp Developments and Standard 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 NioCorp Developments and Standard Lithium into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between NioCorp Developments Ltd and Standard Lithium, you can compare the effects of market volatilities on NioCorp Developments and Standard 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 NioCorp Developments with a short position of Standard Lithium. Check out your portfolio center. Please also check ongoing floating volatility patterns of NioCorp Developments and Standard Lithium.
Diversification Opportunities for NioCorp Developments and Standard Lithium
-0.26 | Correlation Coefficient |
Very good diversification
The 3 months correlation between NioCorp and Standard is -0.26. Overlapping area represents the amount of risk that can be diversified away by holding NioCorp Developments Ltd and Standard Lithium in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Standard Lithium and NioCorp Developments 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 NioCorp Developments Ltd are associated (or correlated) with Standard Lithium. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Standard Lithium has no effect on the direction of NioCorp Developments i.e., NioCorp Developments and Standard Lithium go up and down completely randomly.
Pair Corralation between NioCorp Developments and Standard Lithium
Allowing for the 90-day total investment horizon NioCorp Developments Ltd is expected to under-perform the Standard Lithium. But the stock apears to be less risky and, when comparing its historical volatility, NioCorp Developments Ltd is 1.33 times less risky than Standard Lithium. The stock trades about -0.32 of its potential returns per unit of risk. The Standard Lithium is currently generating about -0.19 of returns per unit of risk over similar time horizon. If you would invest 211.00 in Standard Lithium on August 24, 2024 and sell it today you would lose (45.00) from holding Standard Lithium or give up 21.33% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
NioCorp Developments Ltd vs. Standard Lithium
Performance |
| Timeline |
| NioCorp Developments |
| Standard Lithium |
NioCorp Developments and Standard Lithium Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with NioCorp Developments and Standard Lithium
The main advantage of trading using opposite NioCorp Developments and Standard Lithium positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if NioCorp Developments position performs unexpectedly, Standard 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 Standard Lithium will offset losses from the drop in Standard Lithium's long position.| NioCorp Developments vs. MP Materials Corp | NioCorp Developments vs. Vale SA ADR | NioCorp Developments vs. Vizsla Resources Corp | NioCorp Developments vs. Electra Battery Materials |
| Standard Lithium vs. Lithium Americas Corp | Standard Lithium vs. Piedmont Lithium Ltd | Standard Lithium vs. NioCorp Developments Ltd | Standard Lithium vs. Teck Resources Ltd |
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 Companies Directory module to evaluate performance of over 100,000 Stocks, Funds, and ETFs against different fundamentals.
Other Complementary Tools
| Investing Opportunities Build portfolios using our predefined set of ideas and optimize them against your investing preferences | |
| Portfolio Holdings Check your current holdings and cash postion to detemine if your portfolio needs rebalancing | |
| Idea Optimizer Use advanced portfolio builder with pre-computed micro ideas to build optimal portfolio | |
| Portfolio Manager State of the art Portfolio Manager to monitor and improve performance of your invested capital | |
| Commodity Channel Use Commodity Channel Index to analyze current equity momentum |