Correlation Between Sigma Lithium and Callinex Mines
Can any of the company-specific risk be diversified away by investing in both Sigma Lithium and Callinex Mines 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 Sigma Lithium and Callinex Mines into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Sigma Lithium Resources and Callinex Mines, you can compare the effects of market volatilities on Sigma Lithium and Callinex Mines 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 Sigma Lithium with a short position of Callinex Mines. Check out your portfolio center. Please also check ongoing floating volatility patterns of Sigma Lithium and Callinex Mines.
Diversification Opportunities for Sigma Lithium and Callinex Mines
0.25 | Correlation Coefficient |
Modest diversification
The 3 months correlation between Sigma and Callinex is 0.25. Overlapping area represents the amount of risk that can be diversified away by holding Sigma Lithium Resources and Callinex Mines in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Callinex Mines and Sigma 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 Sigma Lithium Resources are associated (or correlated) with Callinex Mines. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Callinex Mines has no effect on the direction of Sigma Lithium i.e., Sigma Lithium and Callinex Mines go up and down completely randomly.
Pair Corralation between Sigma Lithium and Callinex Mines
Given the investment horizon of 90 days Sigma Lithium Resources is expected to generate 1.63 times more return on investment than Callinex Mines. However, Sigma Lithium is 1.63 times more volatile than Callinex Mines. It trades about 0.03 of its potential returns per unit of risk. Callinex Mines is currently generating about -0.25 per unit of risk. If you would invest 1,358 in Sigma Lithium Resources on September 1, 2024 and sell it today you would earn a total of 18.00 from holding Sigma Lithium Resources or generate 1.33% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Sigma Lithium Resources vs. Callinex Mines
Performance |
| Timeline |
| Sigma Lithium Resources |
| Callinex Mines |
Sigma Lithium and Callinex Mines Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Sigma Lithium and Callinex Mines
The main advantage of trading using opposite Sigma Lithium and Callinex Mines positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Sigma Lithium position performs unexpectedly, Callinex Mines 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 Callinex Mines will offset losses from the drop in Callinex Mines' long position.| Sigma Lithium vs. Piedmont Lithium Ltd | Sigma Lithium vs. Standard Lithium | Sigma Lithium vs. MP Materials Corp | Sigma Lithium vs. Vale SA ADR |
| Callinex Mines vs. West Mining Corp | Callinex Mines vs. Flying Nickel Mining | Callinex Mines vs. Forum Energy Metals | Callinex Mines vs. Jourdan 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 Economic Indicators module to top statistical indicators that provide insights into how an economy is performing.
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