Correlation Between Noram Lithium and Highway 50
Can any of the company-specific risk be diversified away by investing in both Noram Lithium and Highway 50 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 Highway 50 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 Highway 50 Gold, you can compare the effects of market volatilities on Noram Lithium and Highway 50 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 Highway 50. Check out your portfolio center. Please also check ongoing floating volatility patterns of Noram Lithium and Highway 50.
Diversification Opportunities for Noram Lithium and Highway 50
-0.43 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Noram and Highway is -0.43. Overlapping area represents the amount of risk that can be diversified away by holding Noram Lithium Corp and Highway 50 Gold in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Highway 50 Gold 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 Highway 50. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Highway 50 Gold has no effect on the direction of Noram Lithium i.e., Noram Lithium and Highway 50 go up and down completely randomly.
Pair Corralation between Noram Lithium and Highway 50
Assuming the 90 days horizon Noram Lithium Corp is expected to generate 0.97 times more return on investment than Highway 50. However, Noram Lithium Corp is 1.04 times less risky than Highway 50. It trades about 0.04 of its potential returns per unit of risk. Highway 50 Gold is currently generating about 0.02 per unit of risk. If you would invest 12.00 in Noram Lithium Corp on September 3, 2024 and sell it today you would earn a total of 1.00 from holding Noram Lithium Corp or generate 8.33% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Noram Lithium Corp vs. Highway 50 Gold
Performance |
| Timeline |
| Noram Lithium Corp |
| Highway 50 Gold |
Noram Lithium and Highway 50 Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Noram Lithium and Highway 50
The main advantage of trading using opposite Noram Lithium and Highway 50 positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Noram Lithium position performs unexpectedly, Highway 50 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 Highway 50 will offset losses from the drop in Highway 50'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 |
| Highway 50 vs. Atrium Mortgage Investment | Highway 50 vs. Solid Impact Investments | Highway 50 vs. DRI Healthcare Trust | Highway 50 vs. Rocky Mountain Liquor |
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 Funds Screener module to find actively-traded funds from around the world traded on over 30 global exchanges.
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