Correlation Between Noram Lithium and Great Atlantic
Can any of the company-specific risk be diversified away by investing in both Noram Lithium and Great Atlantic 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 Great Atlantic 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 Great Atlantic Resources, you can compare the effects of market volatilities on Noram Lithium and Great Atlantic 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 Great Atlantic. Check out your portfolio center. Please also check ongoing floating volatility patterns of Noram Lithium and Great Atlantic.
Diversification Opportunities for Noram Lithium and Great Atlantic
-0.25 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Noram and Great is -0.25. Overlapping area represents the amount of risk that can be diversified away by holding Noram Lithium Corp and Great Atlantic Resources in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Great Atlantic 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 Great Atlantic. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Great Atlantic Resources has no effect on the direction of Noram Lithium i.e., Noram Lithium and Great Atlantic go up and down completely randomly.
Pair Corralation between Noram Lithium and Great Atlantic
Assuming the 90 days horizon Noram Lithium Corp is expected to under-perform the Great Atlantic. But the stock apears to be less risky and, when comparing its historical volatility, Noram Lithium Corp is 1.91 times less risky than Great Atlantic. The stock trades about -0.03 of its potential returns per unit of risk. The Great Atlantic Resources is currently generating about 0.05 of returns per unit of risk over similar time horizon. If you would invest 5.00 in Great Atlantic Resources on September 3, 2024 and sell it today you would earn a total of 1.50 from holding Great Atlantic Resources or generate 30.0% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Noram Lithium Corp vs. Great Atlantic Resources
Performance |
| Timeline |
| Noram Lithium Corp |
| Great Atlantic Resources |
Noram Lithium and Great Atlantic Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Noram Lithium and Great Atlantic
The main advantage of trading using opposite Noram Lithium and Great Atlantic positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Noram Lithium position performs unexpectedly, Great Atlantic 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 Great Atlantic will offset losses from the drop in Great Atlantic's long position.| Noram Lithium vs. Algoma Steel Group | Noram Lithium vs. Champion Iron | Noram Lithium vs. International Zeolite Corp | Noram Lithium vs. European Residential Real |
| Great Atlantic vs. Algoma Steel Group | Great Atlantic vs. Champion Iron | Great Atlantic vs. International Zeolite Corp | Great Atlantic vs. European Residential Real |
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..
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