Correlation Between Rugby Mining and Lithium Americas
Can any of the company-specific risk be diversified away by investing in both Rugby Mining and Lithium Americas 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 Rugby Mining and Lithium Americas into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Rugby Mining Limited and Lithium Americas Corp, you can compare the effects of market volatilities on Rugby Mining and Lithium Americas 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 Rugby Mining with a short position of Lithium Americas. Check out your portfolio center. Please also check ongoing floating volatility patterns of Rugby Mining and Lithium Americas.
Diversification Opportunities for Rugby Mining and Lithium Americas
-0.29 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Rugby and Lithium is -0.29. Overlapping area represents the amount of risk that can be diversified away by holding Rugby Mining Limited and Lithium Americas Corp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Lithium Americas Corp and Rugby Mining 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 Rugby Mining Limited are associated (or correlated) with Lithium Americas. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Lithium Americas Corp has no effect on the direction of Rugby Mining i.e., Rugby Mining and Lithium Americas go up and down completely randomly.
Pair Corralation between Rugby Mining and Lithium Americas
Assuming the 90 days horizon Rugby Mining Limited is expected to generate 4.31 times more return on investment than Lithium Americas. However, Rugby Mining is 4.31 times more volatile than Lithium Americas Corp. It trades about 0.07 of its potential returns per unit of risk. Lithium Americas Corp is currently generating about -0.26 per unit of risk. If you would invest 3.00 in Rugby Mining Limited on September 12, 2024 and sell it today you would earn a total of 0.00 from holding Rugby Mining Limited or generate 0.0% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Rugby Mining Limited vs. Lithium Americas Corp
Performance |
| Timeline |
| Rugby Mining Limited |
| Lithium Americas Corp |
Rugby Mining and Lithium Americas Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Rugby Mining and Lithium Americas
The main advantage of trading using opposite Rugby Mining and Lithium Americas positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Rugby Mining position performs unexpectedly, Lithium Americas 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 Americas will offset losses from the drop in Lithium Americas' long position.| Rugby Mining vs. Lithium Americas Corp | Rugby Mining vs. Sigma Lithium Resources | Rugby Mining vs. Standard Lithium | Rugby Mining vs. Sayona Mining Limited |
| Lithium Americas vs. Sigma Lithium Resources | Lithium Americas vs. Standard Lithium | Lithium Americas vs. Sayona Mining Limited | Lithium Americas vs. MP Materials Corp |
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 Earnings Calls module to check upcoming earnings announcements updated hourly across public exchanges.
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