Correlation Between St Georges and American Lithium
Can any of the company-specific risk be diversified away by investing in both St Georges and American Lithium 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 St Georges and American Lithium into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between St Georges Eco Mining Corp and American Lithium Minerals, you can compare the effects of market volatilities on St Georges and American Lithium 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 St Georges with a short position of American Lithium. Check out your portfolio center. Please also check ongoing floating volatility patterns of St Georges and American Lithium.
Diversification Opportunities for St Georges and American Lithium
-0.47 | Correlation Coefficient |
Very good diversification
The 3 months correlation between SXOOF and American is -0.47. Overlapping area represents the amount of risk that can be diversified away by holding St Georges Eco Mining Corp and American Lithium Minerals in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on American Lithium Minerals and St Georges 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 St Georges Eco Mining Corp are associated (or correlated) with American Lithium. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of American Lithium Minerals has no effect on the direction of St Georges i.e., St Georges and American Lithium go up and down completely randomly.
Pair Corralation between St Georges and American Lithium
Assuming the 90 days horizon St Georges is expected to generate 1.37 times less return on investment than American Lithium. But when comparing it to its historical volatility, St Georges Eco Mining Corp is 1.2 times less risky than American Lithium. It trades about 0.01 of its potential returns per unit of risk. American Lithium Minerals is currently generating about 0.02 of returns per unit of risk over similar time horizon. If you would invest 5.80 in American Lithium Minerals on September 12, 2024 and sell it today you would lose (4.22) from holding American Lithium Minerals or give up 72.76% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
St Georges Eco Mining Corp vs. American Lithium Minerals
Performance |
| Timeline |
| St Georges Eco |
| American Lithium Minerals |
St Georges and American Lithium Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with St Georges and American Lithium
The main advantage of trading using opposite St Georges and American Lithium positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if St Georges position performs unexpectedly, American Lithium 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 American Lithium will offset losses from the drop in American Lithium's long position.| St Georges vs. Artemis Resources | St Georges vs. Atco Mining | St Georges vs. American Lithium Minerals | St Georges vs. Surge Battery Metals |
| American Lithium vs. Artemis Resources | American Lithium vs. St Georges Eco Mining Corp | American Lithium vs. Atco Mining | American Lithium vs. Avarone 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 Stock Screener module to find equities using a custom stock filter or screen asymmetry in trading patterns, price, volume, or investment outlook..
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