Correlation Between New Pacific and Atlas Lithium
Can any of the company-specific risk be diversified away by investing in both New Pacific and Atlas 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 New Pacific and Atlas Lithium into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between New Pacific Metals and Atlas Lithium, you can compare the effects of market volatilities on New Pacific and Atlas 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 New Pacific with a short position of Atlas Lithium. Check out your portfolio center. Please also check ongoing floating volatility patterns of New Pacific and Atlas Lithium.
Diversification Opportunities for New Pacific and Atlas Lithium
0.79 | Correlation Coefficient |
Poor diversification
The 3 months correlation between New and Atlas is 0.79. Overlapping area represents the amount of risk that can be diversified away by holding New Pacific Metals and Atlas Lithium in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Atlas Lithium and New Pacific 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 New Pacific Metals are associated (or correlated) with Atlas Lithium. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Atlas Lithium has no effect on the direction of New Pacific i.e., New Pacific and Atlas Lithium go up and down completely randomly.
Pair Corralation between New Pacific and Atlas Lithium
Given the investment horizon of 90 days New Pacific Metals is expected to under-perform the Atlas Lithium. But the stock apears to be less risky and, when comparing its historical volatility, New Pacific Metals is 1.69 times less risky than Atlas Lithium. The stock trades about -0.01 of its potential returns per unit of risk. The Atlas Lithium is currently generating about 0.02 of returns per unit of risk over similar time horizon. If you would invest 1,094 in Atlas Lithium on November 9, 2024 and sell it today you would lose (528.00) from holding Atlas Lithium or give up 48.26% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
New Pacific Metals vs. Atlas Lithium
Performance |
| Timeline |
| New Pacific Metals |
| Atlas Lithium |
New Pacific and Atlas Lithium Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with New Pacific and Atlas Lithium
The main advantage of trading using opposite New Pacific and Atlas Lithium positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if New Pacific position performs unexpectedly, Atlas 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 Atlas Lithium will offset losses from the drop in Atlas Lithium's long position.| New Pacific vs. Endeavour Silver Corp | New Pacific vs. Metalla Royalty Streaming | New Pacific vs. Hecla Mining | New Pacific vs. SilverCrest Metals |
| Atlas Lithium vs. SilverCrest Metals | Atlas Lithium vs. New Pacific Metals | Atlas Lithium vs. Endeavour Silver Corp | Atlas Lithium vs. McEwen Mining |
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 Efficient Frontier module to plot and analyze your portfolio and positions against risk-return landscape of the market..
Other Complementary Tools
| Technical Analysis Check basic technical indicators and analysis based on most latest market data | |
| Portfolio Analyzer Portfolio analysis module that provides access to portfolio diagnostics and optimization engine | |
| Crypto Correlations Use cryptocurrency correlation module to diversify your cryptocurrency portfolio across multiple coins | |
| Economic Indicators Top statistical indicators that provide insights into how an economy is performing | |
| Portfolio Center All portfolio management and optimization tools to improve performance of your portfolios |