Correlation Between Standard Lithium and Major Precious
Can any of the company-specific risk be diversified away by investing in both Standard Lithium and Major Precious 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 Major Precious into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Standard Lithium and Major Precious Metals, you can compare the effects of market volatilities on Standard Lithium and Major Precious 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 Major Precious. Check out your portfolio center. Please also check ongoing floating volatility patterns of Standard Lithium and Major Precious.
Diversification Opportunities for Standard Lithium and Major Precious
0.0 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between Standard and Major is 0.0. Overlapping area represents the amount of risk that can be diversified away by holding Standard Lithium and Major Precious Metals in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Major Precious Metals 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 Major Precious. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Major Precious Metals has no effect on the direction of Standard Lithium i.e., Standard Lithium and Major Precious go up and down completely randomly.
Pair Corralation between Standard Lithium and Major Precious
If you would invest 0.01 in Major Precious Metals on September 4, 2024 and sell it today you would earn a total of 0.00 from holding Major Precious Metals or generate 0.0% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Flat |
| Strength | Insignificant |
| Accuracy | 14.29% |
| Values | Daily Returns |
Standard Lithium vs. Major Precious Metals
Performance |
| Timeline |
| Standard Lithium |
| Major Precious Metals |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Very Weak
Standard Lithium and Major Precious Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Standard Lithium and Major Precious
The main advantage of trading using opposite Standard Lithium and Major Precious positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Standard Lithium position performs unexpectedly, Major Precious 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 Major Precious will offset losses from the drop in Major Precious' 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 |
| Major Precious vs. Lithium Americas Corp | Major Precious vs. Sigma Lithium Resources | Major Precious vs. Standard Lithium | Major Precious vs. Sayona Mining Limited |
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 Risk-Return Analysis module to view associations between returns expected from investment and the risk you assume.
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