Correlation Between Norra Metals and Lithium Australia
Can any of the company-specific risk be diversified away by investing in both Norra Metals and Lithium Australia 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 Norra Metals and Lithium Australia into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Norra Metals Corp and Lithium Australia NL, you can compare the effects of market volatilities on Norra Metals and Lithium Australia 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 Norra Metals with a short position of Lithium Australia. Check out your portfolio center. Please also check ongoing floating volatility patterns of Norra Metals and Lithium Australia.
Diversification Opportunities for Norra Metals and Lithium Australia
0.0 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between Norra and Lithium is 0.0. Overlapping area represents the amount of risk that can be diversified away by holding Norra Metals Corp and Lithium Australia NL in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Lithium Australia and Norra Metals 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 Norra Metals Corp are associated (or correlated) with Lithium Australia. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Lithium Australia has no effect on the direction of Norra Metals i.e., Norra Metals and Lithium Australia go up and down completely randomly.
Pair Corralation between Norra Metals and Lithium Australia
If you would invest 1.00 in Norra Metals Corp on August 24, 2024 and sell it today you would earn a total of 0.00 from holding Norra Metals Corp or generate 0.0% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Flat |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Norra Metals Corp vs. Lithium Australia NL
Performance |
| Timeline |
| Norra Metals Corp |
| Lithium Australia |
Norra Metals and Lithium Australia Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Norra Metals and Lithium Australia
The main advantage of trading using opposite Norra Metals and Lithium Australia positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Norra Metals position performs unexpectedly, Lithium Australia 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 Australia will offset losses from the drop in Lithium Australia's long position.| Norra Metals vs. NETGEAR | Norra Metals vs. Hertz Global Holdings | Norra Metals vs. United Rentals | Norra Metals vs. Uber Technologies |
| Lithium Australia vs. Mundoro Capital | Lithium Australia vs. Norra Metals Corp | Lithium Australia vs. Ceylon Graphite Corp | Lithium Australia vs. Mason Graphite |
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 Top Crypto Exchanges module to search and analyze digital assets across top global cryptocurrency exchanges.
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