Correlation Between Simply Better and Stria Lithium
Can any of the company-specific risk be diversified away by investing in both Simply Better and Stria Lithium 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 Simply Better and Stria Lithium into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Simply Better Brands and Stria Lithium, you can compare the effects of market volatilities on Simply Better and Stria Lithium 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 Simply Better with a short position of Stria Lithium. Check out your portfolio center. Please also check ongoing floating volatility patterns of Simply Better and Stria Lithium.
Diversification Opportunities for Simply Better and Stria Lithium
-0.72 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between Simply and Stria is -0.72. Overlapping area represents the amount of risk that can be diversified away by holding Simply Better Brands and Stria Lithium in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Stria Lithium and Simply Better 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 Simply Better Brands are associated (or correlated) with Stria Lithium. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Stria Lithium has no effect on the direction of Simply Better i.e., Simply Better and Stria Lithium go up and down completely randomly.
Pair Corralation between Simply Better and Stria Lithium
Assuming the 90 days trading horizon Simply Better is expected to generate 5.26 times less return on investment than Stria Lithium. But when comparing it to its historical volatility, Simply Better Brands is 2.97 times less risky than Stria Lithium. It trades about 0.1 of its potential returns per unit of risk. Stria Lithium is currently generating about 0.18 of returns per unit of risk over similar time horizon. If you would invest 5.00 in Stria Lithium on October 21, 2024 and sell it today you would earn a total of 1.50 from holding Stria Lithium or generate 30.0% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Simply Better Brands vs. Stria Lithium
Performance |
| Timeline |
| Simply Better Brands |
| Stria Lithium |
Simply Better and Stria Lithium Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Simply Better and Stria Lithium
The main advantage of trading using opposite Simply Better and Stria Lithium positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Simply Better position performs unexpectedly, Stria Lithium 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 Stria Lithium will offset losses from the drop in Stria Lithium's long position.| Simply Better vs. HLS Therapeutics | Simply Better vs. Cipher Pharmaceuticals | Simply Better vs. Medicenna Therapeutics Corp | Simply Better vs. iShares Canadian HYBrid |
| Stria Lithium vs. Silver Predator Corp | Stria Lithium vs. Stakeholder Gold Corp | Stria Lithium vs. ArcWest Exploration | Stria Lithium vs. Silver Range Resources |
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 Analysis module to research over 250,000 global equities including funds, stocks and ETFs to find investment opportunities.
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