Correlation Between Sigma Lithium and Northern Lion
Can any of the company-specific risk be diversified away by investing in both Sigma Lithium and Northern Lion 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 Northern Lion 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 Northern Lion Gold, you can compare the effects of market volatilities on Sigma Lithium and Northern Lion 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 Northern Lion. Check out your portfolio center. Please also check ongoing floating volatility patterns of Sigma Lithium and Northern Lion.
Diversification Opportunities for Sigma Lithium and Northern Lion
0.0 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between Sigma and Northern is 0.0. Overlapping area represents the amount of risk that can be diversified away by holding Sigma Lithium Resources and Northern Lion Gold in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Northern Lion Gold 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 Northern Lion. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Northern Lion Gold has no effect on the direction of Sigma Lithium i.e., Sigma Lithium and Northern Lion go up and down completely randomly.
Pair Corralation between Sigma Lithium and Northern Lion
If you would invest 10.00 in Northern Lion Gold on November 3, 2024 and sell it today you would earn a total of 0.00 from holding Northern Lion Gold or generate 0.0% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Flat |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Sigma Lithium Resources vs. Northern Lion Gold
Performance |
| Timeline |
| Sigma Lithium Resources |
| Northern Lion Gold |
Sigma Lithium and Northern Lion Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Sigma Lithium and Northern Lion
The main advantage of trading using opposite Sigma Lithium and Northern Lion positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Sigma Lithium position performs unexpectedly, Northern Lion 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 Northern Lion will offset losses from the drop in Northern Lion's 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 |
| Northern Lion vs. SYNTHETIC FIXED INCOME | Northern Lion vs. Axalta Coating Systems | Northern Lion vs. Hawkins | Northern Lion vs. Flutter Entertainment plc |
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 Price Ceiling Movement module to calculate and plot Price Ceiling Movement for different equity instruments.
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