Correlation Between Cornish Metals and Sigma Lithium
Can any of the company-specific risk be diversified away by investing in both Cornish Metals and Sigma 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 Cornish Metals and Sigma Lithium into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Cornish Metals and Sigma Lithium Resources, you can compare the effects of market volatilities on Cornish Metals and Sigma 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 Cornish Metals with a short position of Sigma Lithium. Check out your portfolio center. Please also check ongoing floating volatility patterns of Cornish Metals and Sigma Lithium.
Diversification Opportunities for Cornish Metals and Sigma Lithium
-0.14 | Correlation Coefficient |
Good diversification
The 3 months correlation between Cornish and Sigma is -0.14. Overlapping area represents the amount of risk that can be diversified away by holding Cornish Metals and Sigma Lithium Resources in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Sigma Lithium Resources and Cornish 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 Cornish Metals are associated (or correlated) with Sigma Lithium. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Sigma Lithium Resources has no effect on the direction of Cornish Metals i.e., Cornish Metals and Sigma Lithium go up and down completely randomly.
Pair Corralation between Cornish Metals and Sigma Lithium
Assuming the 90 days horizon Cornish Metals is expected to generate 1.67 times less return on investment than Sigma Lithium. In addition to that, Cornish Metals is 3.1 times more volatile than Sigma Lithium Resources. It trades about 0.02 of its total potential returns per unit of risk. Sigma Lithium Resources is currently generating about 0.1 per unit of volatility. If you would invest 1,103 in Sigma Lithium Resources on August 29, 2024 and sell it today you would earn a total of 267.00 from holding Sigma Lithium Resources or generate 24.21% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 98.44% |
| Values | Daily Returns |
Cornish Metals vs. Sigma Lithium Resources
Performance |
| Timeline |
| Cornish Metals |
| Sigma Lithium Resources |
Cornish Metals and Sigma Lithium Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Cornish Metals and Sigma Lithium
The main advantage of trading using opposite Cornish Metals and Sigma Lithium positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Cornish Metals position performs unexpectedly, Sigma 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 Sigma Lithium will offset losses from the drop in Sigma Lithium's long position.| Cornish Metals vs. Filo Mining Corp | Cornish Metals vs. Pan Global Resources | Cornish Metals vs. Alphamin Resources Corp | Cornish Metals vs. Adriatic Metals Plc |
| Sigma Lithium vs. Piedmont Lithium Ltd | Sigma Lithium vs. Standard Lithium | Sigma Lithium vs. MP Materials Corp | Sigma Lithium vs. Vale SA ADR |
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 Companies Directory module to evaluate performance of over 100,000 Stocks, Funds, and ETFs against different fundamentals.
Other Complementary Tools
| Investing Opportunities Build portfolios using our predefined set of ideas and optimize them against your investing preferences | |
| Stock Tickers Use high-impact, comprehensive, and customizable stock tickers that can be easily integrated to any websites | |
| Money Flow Index Determine momentum by analyzing Money Flow Index and other technical indicators | |
| Stock Screener Find equities using a custom stock filter or screen asymmetry in trading patterns, price, volume, or investment outlook. | |
| Global Correlations Find global opportunities by holding instruments from different markets |