Correlation Between Sigma Lithium and Sierra Metals
Can any of the company-specific risk be diversified away by investing in both Sigma Lithium and Sierra Metals 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 Sierra Metals 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 Sierra Metals, you can compare the effects of market volatilities on Sigma Lithium and Sierra Metals 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 Sierra Metals. Check out your portfolio center. Please also check ongoing floating volatility patterns of Sigma Lithium and Sierra Metals.
Diversification Opportunities for Sigma Lithium and Sierra Metals
0.0 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between Sigma and Sierra is 0.0. Overlapping area represents the amount of risk that can be diversified away by holding Sigma Lithium Resources and Sierra Metals in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Sierra Metals 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 Sierra Metals. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Sierra Metals has no effect on the direction of Sigma Lithium i.e., Sigma Lithium and Sierra Metals go up and down completely randomly.
Pair Corralation between Sigma Lithium and Sierra Metals
If you would invest 1,117 in Sigma Lithium Resources on October 22, 2024 and sell it today you would earn a total of 84.00 from holding Sigma Lithium Resources or generate 7.52% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Flat |
| Strength | Insignificant |
| Accuracy | 5.56% |
| Values | Daily Returns |
Sigma Lithium Resources vs. Sierra Metals
Performance |
| Timeline |
| Sigma Lithium Resources |
| Sierra Metals |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Very Weak
Sigma Lithium and Sierra Metals Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Sigma Lithium and Sierra Metals
The main advantage of trading using opposite Sigma Lithium and Sierra Metals positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Sigma Lithium position performs unexpectedly, Sierra Metals 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 Sierra Metals will offset losses from the drop in Sierra Metals' 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 |
| Sierra Metals vs. Kenorland Minerals | Sierra Metals vs. Canstar Resources | Sierra Metals vs. Prime Mining Corp | Sierra Metals vs. Euro Manganese |
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.
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