Correlation Between Major Precious and Lithium Americas
Can any of the company-specific risk be diversified away by investing in both Major Precious and Lithium Americas 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 Major Precious and Lithium Americas into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Major Precious Metals and Lithium Americas Corp, you can compare the effects of market volatilities on Major Precious and Lithium Americas 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 Major Precious with a short position of Lithium Americas. Check out your portfolio center. Please also check ongoing floating volatility patterns of Major Precious and Lithium Americas.
Diversification Opportunities for Major Precious and Lithium Americas
0.0 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between Major and Lithium is 0.0. Overlapping area represents the amount of risk that can be diversified away by holding Major Precious Metals and Lithium Americas Corp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Lithium Americas Corp and Major Precious 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 Major Precious Metals are associated (or correlated) with Lithium Americas. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Lithium Americas Corp has no effect on the direction of Major Precious i.e., Major Precious and Lithium Americas go up and down completely randomly.
Pair Corralation between Major Precious and Lithium Americas
Assuming the 90 days horizon Major Precious Metals is expected to generate 9.81 times more return on investment than Lithium Americas. However, Major Precious is 9.81 times more volatile than Lithium Americas Corp. It trades about 0.05 of its potential returns per unit of risk. Lithium Americas Corp is currently generating about -0.06 per unit of risk. If you would invest 12.00 in Major Precious Metals on October 23, 2024 and sell it today you would lose (11.99) from holding Major Precious Metals or give up 99.92% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Flat |
| Strength | Insignificant |
| Accuracy | 99.78% |
| Values | Daily Returns |
Major Precious Metals vs. Lithium Americas Corp
Performance |
| Timeline |
| Major Precious Metals |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Very Weak
| Lithium Americas Corp |
Major Precious and Lithium Americas Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Major Precious and Lithium Americas
The main advantage of trading using opposite Major Precious and Lithium Americas positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Major Precious position performs unexpectedly, Lithium Americas 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 Lithium Americas will offset losses from the drop in Lithium Americas' long position.| Major Precious vs. Lithium Americas Corp | Major Precious vs. Sigma Lithium Resources | Major Precious vs. Standard Lithium | Major Precious vs. Sayona Mining Limited |
| Lithium Americas vs. Sigma Lithium Resources | Lithium Americas vs. Standard Lithium | Lithium Americas vs. Sayona Mining Limited | Lithium Americas vs. MP Materials Corp |
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 Portfolio Holdings module to check your current holdings and cash postion to detemine if your portfolio needs rebalancing.
Other Complementary Tools
| Bonds Directory Find actively traded corporate debentures issued by US companies | |
| Sign In To Macroaxis Sign in to explore Macroaxis' wealth optimization platform and fintech modules | |
| Share Portfolio Track or share privately all of your investments from the convenience of any device | |
| Correlation Analysis Reduce portfolio risk simply by holding instruments which are not perfectly correlated | |
| Balance Of Power Check stock momentum by analyzing Balance Of Power indicator and other technical ratios |