Correlation Between Stria Lithium and Adventus Mining
Can any of the company-specific risk be diversified away by investing in both Stria Lithium and Adventus Mining 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 Stria Lithium and Adventus Mining into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Stria Lithium and Adventus Mining, you can compare the effects of market volatilities on Stria Lithium and Adventus Mining 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 Stria Lithium with a short position of Adventus Mining. Check out your portfolio center. Please also check ongoing floating volatility patterns of Stria Lithium and Adventus Mining.
Diversification Opportunities for Stria Lithium and Adventus Mining
0.37 | Correlation Coefficient |
Weak diversification
The 3 months correlation between Stria and Adventus is 0.37. Overlapping area represents the amount of risk that can be diversified away by holding Stria Lithium and Adventus Mining in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Adventus Mining and Stria 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 Stria Lithium are associated (or correlated) with Adventus Mining. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Adventus Mining has no effect on the direction of Stria Lithium i.e., Stria Lithium and Adventus Mining go up and down completely randomly.
Pair Corralation between Stria Lithium and Adventus Mining
Assuming the 90 days horizon Stria Lithium is expected to generate 4.75 times more return on investment than Adventus Mining. However, Stria Lithium is 4.75 times more volatile than Adventus Mining. It trades about 0.06 of its potential returns per unit of risk. Adventus Mining is currently generating about 0.04 per unit of risk. If you would invest 16.00 in Stria Lithium on August 25, 2024 and sell it today you would lose (11.86) from holding Stria Lithium or give up 74.12% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 77.18% |
| Values | Daily Returns |
Stria Lithium vs. Adventus Mining
Performance |
| Timeline |
| Stria Lithium |
| Adventus Mining |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Very Weak
Stria Lithium and Adventus Mining Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Stria Lithium and Adventus Mining
The main advantage of trading using opposite Stria Lithium and Adventus Mining positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Stria Lithium position performs unexpectedly, Adventus Mining 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 Adventus Mining will offset losses from the drop in Adventus Mining's long position.| Stria Lithium vs. Norra Metals Corp | Stria Lithium vs. Amarc Resources | Stria Lithium vs. ZincX Resources Corp | Stria Lithium vs. Nuinsco Resources Limited |
| Adventus Mining vs. Pan Global Resources | Adventus Mining vs. Eagle Plains Resources | Adventus Mining vs. Troilus Gold Corp | Adventus Mining vs. Boss Resources |
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 Investing Opportunities module to build portfolios using our predefined set of ideas and optimize them against your investing preferences.
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