Correlation Between Standard Lithium and Northern Lion
Can any of the company-specific risk be diversified away by investing in both Standard 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 Standard 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 Standard Lithium and Northern Lion Gold, you can compare the effects of market volatilities on Standard 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 Standard Lithium with a short position of Northern Lion. Check out your portfolio center. Please also check ongoing floating volatility patterns of Standard Lithium and Northern Lion.
Diversification Opportunities for Standard Lithium and Northern Lion
0.0 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between Standard and Northern is 0.0. Overlapping area represents the amount of risk that can be diversified away by holding Standard Lithium 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 Standard 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 Standard Lithium 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 Standard Lithium i.e., Standard Lithium and Northern Lion go up and down completely randomly.
Pair Corralation between Standard Lithium and Northern Lion
If you would invest 150.00 in Standard Lithium on October 24, 2024 and sell it today you would earn a total of 12.00 from holding Standard Lithium or generate 8.0% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Flat |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Standard Lithium vs. Northern Lion Gold
Performance |
| Timeline |
| Standard Lithium |
| Northern Lion Gold |
Standard Lithium and Northern Lion Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Standard Lithium and Northern Lion
The main advantage of trading using opposite Standard Lithium and Northern Lion positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Standard 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.| Standard Lithium vs. Lithium Americas Corp | Standard Lithium vs. Piedmont Lithium Ltd | Standard Lithium vs. NioCorp Developments Ltd | Standard Lithium vs. Teck Resources Ltd |
| Northern Lion vs. Piedmont Lithium Ltd | Northern Lion vs. Sigma Lithium Resources | Northern Lion vs. Standard Lithium | Northern Lion 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 Content Syndication module to quickly integrate customizable finance content to your own investment portal.
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