Correlation Between Noram Lithium and CDN Maverick
Can any of the company-specific risk be diversified away by investing in both Noram Lithium and CDN Maverick 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 CDN Maverick 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 CDN Maverick Capital, you can compare the effects of market volatilities on Noram Lithium and CDN Maverick 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 CDN Maverick. Check out your portfolio center. Please also check ongoing floating volatility patterns of Noram Lithium and CDN Maverick.
Diversification Opportunities for Noram Lithium and CDN Maverick
-0.56 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Noram and CDN is -0.56. Overlapping area represents the amount of risk that can be diversified away by holding Noram Lithium Corp and CDN Maverick Capital in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on CDN Maverick Capital 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 CDN Maverick. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of CDN Maverick Capital has no effect on the direction of Noram Lithium i.e., Noram Lithium and CDN Maverick go up and down completely randomly.
Pair Corralation between Noram Lithium and CDN Maverick
Assuming the 90 days horizon Noram Lithium Corp is expected to generate 1.54 times more return on investment than CDN Maverick. However, Noram Lithium is 1.54 times more volatile than CDN Maverick Capital. It trades about -0.05 of its potential returns per unit of risk. CDN Maverick Capital is currently generating about -0.1 per unit of risk. If you would invest 9.80 in Noram Lithium Corp on August 29, 2024 and sell it today you would lose (0.80) from holding Noram Lithium Corp or give up 8.16% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Noram Lithium Corp vs. CDN Maverick Capital
Performance |
| Timeline |
| Noram Lithium Corp |
| CDN Maverick Capital |
Noram Lithium and CDN Maverick Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Noram Lithium and CDN Maverick
The main advantage of trading using opposite Noram Lithium and CDN Maverick positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Noram Lithium position performs unexpectedly, CDN Maverick 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 CDN Maverick will offset losses from the drop in CDN Maverick's long position.| Noram Lithium vs. Anson Resources Limited | Noram Lithium vs. Aurelia Metals Limited | Noram Lithium vs. Altura Mining Limited | Noram Lithium vs. Australian Vanadium Limited |
| CDN Maverick vs. Aurelia Metals Limited | CDN Maverick vs. Artemis Resources | CDN Maverick vs. Ascendant Resources | CDN Maverick vs. Azimut Exploration |
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 Search module to search for actively traded equities including funds and ETFs from over 30 global markets.
Other Complementary Tools
| Price Transformation Use Price Transformation models to analyze the depth of different equity instruments across global markets | |
| Commodity Directory Find actively traded commodities issued by global exchanges | |
| Premium Stories Follow Macroaxis premium stories from verified contributors across different equity types, categories and coverage scope | |
| My Watchlist Analysis Analyze my current watchlist and to refresh optimization strategy. Macroaxis watchlist is based on self-learning algorithm to remember stocks you like | |
| Odds Of Bankruptcy Get analysis of equity chance of financial distress in the next 2 years |