Correlation Between Stria Lithium and Salazar Resources
Can any of the company-specific risk be diversified away by investing in both Stria Lithium and Salazar Resources 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 Salazar Resources into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Stria Lithium and Salazar Resources Limited, you can compare the effects of market volatilities on Stria Lithium and Salazar Resources 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 Salazar Resources. Check out your portfolio center. Please also check ongoing floating volatility patterns of Stria Lithium and Salazar Resources.
Diversification Opportunities for Stria Lithium and Salazar Resources
0.6 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Stria and Salazar is 0.6. Overlapping area represents the amount of risk that can be diversified away by holding Stria Lithium and Salazar Resources Limited in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Salazar Resources 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 Salazar Resources. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Salazar Resources has no effect on the direction of Stria Lithium i.e., Stria Lithium and Salazar Resources go up and down completely randomly.
Pair Corralation between Stria Lithium and Salazar Resources
Assuming the 90 days horizon Stria Lithium is expected to generate 2.74 times more return on investment than Salazar Resources. However, Stria Lithium is 2.74 times more volatile than Salazar Resources Limited. It trades about 0.15 of its potential returns per unit of risk. Salazar Resources Limited is currently generating about -0.02 per unit of risk. If you would invest 2.50 in Stria Lithium on August 28, 2024 and sell it today you would earn a total of 1.64 from holding Stria Lithium or generate 65.6% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 97.67% |
| Values | Daily Returns |
Stria Lithium vs. Salazar Resources Limited
Performance |
| Timeline |
| Stria Lithium |
| Salazar Resources |
Stria Lithium and Salazar Resources Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Stria Lithium and Salazar Resources
The main advantage of trading using opposite Stria Lithium and Salazar Resources positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Stria Lithium position performs unexpectedly, Salazar Resources 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 Salazar Resources will offset losses from the drop in Salazar Resources' long position.| Stria Lithium vs. Premium Nickel Resources | Stria Lithium vs. Juggernaut Exploration | Stria Lithium vs. Intrepid Metals Corp | Stria Lithium vs. Group Ten Metals |
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 Cryptocurrency Center module to build and monitor diversified portfolio of extremely risky digital assets and cryptocurrency.
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