Correlation Between Noram Lithium and Champion Bear
Can any of the company-specific risk be diversified away by investing in both Noram Lithium and Champion Bear 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 Noram Lithium and Champion Bear into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Noram Lithium Corp and Champion Bear Resources, you can compare the effects of market volatilities on Noram Lithium and Champion Bear 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 Noram Lithium with a short position of Champion Bear. Check out your portfolio center. Please also check ongoing floating volatility patterns of Noram Lithium and Champion Bear.
Diversification Opportunities for Noram Lithium and Champion Bear
0.86 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between Noram and Champion is 0.86. Overlapping area represents the amount of risk that can be diversified away by holding Noram Lithium Corp and Champion Bear Resources in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Champion Bear Resources and Noram Lithium 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 Noram Lithium Corp are associated (or correlated) with Champion Bear. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Champion Bear Resources has no effect on the direction of Noram Lithium i.e., Noram Lithium and Champion Bear go up and down completely randomly.
Pair Corralation between Noram Lithium and Champion Bear
Assuming the 90 days horizon Noram Lithium Corp is expected to under-perform the Champion Bear. But the stock apears to be less risky and, when comparing its historical volatility, Noram Lithium Corp is 2.86 times less risky than Champion Bear. The stock trades about -0.05 of its potential returns per unit of risk. The Champion Bear Resources is currently generating about 0.05 of returns per unit of risk over similar time horizon. If you would invest 12.00 in Champion Bear Resources on December 1, 2024 and sell it today you would lose (9.50) from holding Champion Bear Resources or give up 79.17% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Noram Lithium Corp vs. Champion Bear Resources
Performance |
| Timeline |
| Noram Lithium Corp |
| Champion Bear Resources |
Noram Lithium and Champion Bear Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Noram Lithium and Champion Bear
The main advantage of trading using opposite Noram Lithium and Champion Bear positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Noram Lithium position performs unexpectedly, Champion Bear 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 Champion Bear will offset losses from the drop in Champion Bear's long position.| Noram Lithium vs. Iconic Minerals | Noram Lithium vs. Imagine Lithium | Noram Lithium vs. Grid Metals Corp | Noram Lithium vs. New Age Metals |
| Champion Bear vs. Nova Leap Health | Champion Bear vs. Calibre Mining Corp | Champion Bear vs. Altair Resources | Champion Bear vs. Data Communications Management |
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 Equity Analysis module to research over 250,000 global equities including funds, stocks and ETFs to find investment opportunities.
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