Correlation Between Nova Lithium and Hannan Metals
Can any of the company-specific risk be diversified away by investing in both Nova Lithium and Hannan Metals 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 Nova Lithium and Hannan Metals into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Nova Lithium Corp and Hannan Metals, you can compare the effects of market volatilities on Nova Lithium and Hannan Metals 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 Nova Lithium with a short position of Hannan Metals. Check out your portfolio center. Please also check ongoing floating volatility patterns of Nova Lithium and Hannan Metals.
Diversification Opportunities for Nova Lithium and Hannan Metals
-0.48 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Nova and Hannan is -0.48. Overlapping area represents the amount of risk that can be diversified away by holding Nova Lithium Corp and Hannan Metals in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Hannan Metals and Nova 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 Nova Lithium Corp are associated (or correlated) with Hannan Metals. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Hannan Metals has no effect on the direction of Nova Lithium i.e., Nova Lithium and Hannan Metals go up and down completely randomly.
Pair Corralation between Nova Lithium and Hannan Metals
Assuming the 90 days horizon Nova Lithium Corp is expected to under-perform the Hannan Metals. In addition to that, Nova Lithium is 1.2 times more volatile than Hannan Metals. It trades about -0.02 of its total potential returns per unit of risk. Hannan Metals is currently generating about 0.14 per unit of volatility. If you would invest 43.00 in Hannan Metals on November 27, 2024 and sell it today you would earn a total of 23.00 from holding Hannan Metals or generate 53.49% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Nova Lithium Corp vs. Hannan Metals
Performance |
| Timeline |
| Nova Lithium Corp |
| Hannan Metals |
Nova Lithium and Hannan Metals Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Nova Lithium and Hannan Metals
The main advantage of trading using opposite Nova Lithium and Hannan Metals positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Nova Lithium position performs unexpectedly, Hannan Metals 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 Hannan Metals will offset losses from the drop in Hannan Metals' long position.| Nova Lithium vs. Sandstorm Gold Ltd | Nova Lithium vs. Penn National Gaming | Nova Lithium vs. Titan America SA | Nova Lithium vs. Avarone Metals |
| Hannan Metals vs. Atco Mining | Hannan Metals vs. Leading Edge Materials | Hannan Metals vs. Arianne Phosphate | Hannan Metals vs. Global Battery Metals |
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.
Other Complementary Tools
| Odds Of Bankruptcy Get analysis of equity chance of financial distress in the next 2 years | |
| Volatility Analysis Get historical volatility and risk analysis based on latest market data | |
| Commodity Directory Find actively traded commodities issued by global exchanges | |
| Pattern Recognition Use different Pattern Recognition models to time the market across multiple global exchanges | |
| Pair Correlation Compare performance and examine fundamental relationship between any two equity instruments |