Correlation Between Northann Corp and Lithium One
Can any of the company-specific risk be diversified away by investing in both Northann Corp and Lithium One 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 Northann Corp and Lithium One into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Northann Corp and Lithium One Metals, you can compare the effects of market volatilities on Northann Corp and Lithium One 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 Northann Corp with a short position of Lithium One. Check out your portfolio center. Please also check ongoing floating volatility patterns of Northann Corp and Lithium One.
Diversification Opportunities for Northann Corp and Lithium One
-0.06 | Correlation Coefficient |
Good diversification
The 3 months correlation between Northann and Lithium is -0.06. Overlapping area represents the amount of risk that can be diversified away by holding Northann Corp and Lithium One Metals in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Lithium One Metals and Northann Corp 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 Northann Corp are associated (or correlated) with Lithium One. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Lithium One Metals has no effect on the direction of Northann Corp i.e., Northann Corp and Lithium One go up and down completely randomly.
Pair Corralation between Northann Corp and Lithium One
Considering the 90-day investment horizon Northann Corp is expected to under-perform the Lithium One. But the stock apears to be less risky and, when comparing its historical volatility, Northann Corp is 2.0 times less risky than Lithium One. The stock trades about 0.0 of its potential returns per unit of risk. The Lithium One Metals is currently generating about 0.05 of returns per unit of risk over similar time horizon. If you would invest 45.00 in Lithium One Metals on November 28, 2024 and sell it today you would lose (43.88) from holding Lithium One Metals or give up 97.51% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 68.48% |
| Values | Daily Returns |
Northann Corp vs. Lithium One Metals
Performance |
| Timeline |
| Northann Corp |
| Lithium One Metals |
Northann Corp and Lithium One Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Northann Corp and Lithium One
The main advantage of trading using opposite Northann Corp and Lithium One positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Northann Corp position performs unexpectedly, Lithium One 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 One will offset losses from the drop in Lithium One's long position.| Northann Corp vs. Rocky Brands | Northann Corp vs. Unilever PLC ADR | Northann Corp vs. Sun Country Airlines | Northann Corp vs. Verra Mobility Corp |
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 Bond Analysis module to evaluate and analyze corporate bonds as a potential investment for your portfolios..
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