Correlation Between Strategic Resources and Core Lithium
Can any of the company-specific risk be diversified away by investing in both Strategic Resources and Core 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 Strategic Resources and Core Lithium into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Strategic Resources and Core Lithium, you can compare the effects of market volatilities on Strategic Resources and Core 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 Strategic Resources with a short position of Core Lithium. Check out your portfolio center. Please also check ongoing floating volatility patterns of Strategic Resources and Core Lithium.
Diversification Opportunities for Strategic Resources and Core Lithium
0.0 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between Strategic and Core is 0.0. Overlapping area represents the amount of risk that can be diversified away by holding Strategic Resources and Core Lithium in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Core Lithium and Strategic Resources 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 Strategic Resources are associated (or correlated) with Core Lithium. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Core Lithium has no effect on the direction of Strategic Resources i.e., Strategic Resources and Core Lithium go up and down completely randomly.
Pair Corralation between Strategic Resources and Core Lithium
If you would invest 5.40 in Core Lithium on November 5, 2024 and sell it today you would earn a total of 0.87 from holding Core Lithium or generate 16.11% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Flat |
| Strength | Insignificant |
| Accuracy | 95.24% |
| Values | Daily Returns |
Strategic Resources vs. Core Lithium
Performance |
| Timeline |
| Strategic Resources |
| Core Lithium |
Strategic Resources and Core Lithium Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Strategic Resources and Core Lithium
The main advantage of trading using opposite Strategic Resources and Core Lithium positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Strategic Resources position performs unexpectedly, Core 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 Core Lithium will offset losses from the drop in Core Lithium's long position.| Strategic Resources vs. ZincX Resources Corp | Strategic Resources vs. Nuinsco Resources Limited | Strategic Resources vs. Qubec Nickel Corp | Strategic Resources vs. South Star Battery |
| Core Lithium vs. Macmahon Holdings Limited | Core Lithium vs. Prime Meridian Resources | Core Lithium vs. International Lithium Corp | Core Lithium vs. Hudson 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 Risk-Return Analysis module to view associations between returns expected from investment and the risk you assume.
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