Correlation Between Sayona Mining and Lithium Americas
Can any of the company-specific risk be diversified away by investing in both Sayona Mining and Lithium Americas 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 Sayona Mining and Lithium Americas into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Sayona Mining Limited and Lithium Americas Corp, you can compare the effects of market volatilities on Sayona Mining and Lithium Americas 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 Sayona Mining with a short position of Lithium Americas. Check out your portfolio center. Please also check ongoing floating volatility patterns of Sayona Mining and Lithium Americas.
Diversification Opportunities for Sayona Mining and Lithium Americas
0.49 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Sayona and Lithium is 0.49. Overlapping area represents the amount of risk that can be diversified away by holding Sayona Mining Limited and Lithium Americas Corp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Lithium Americas Corp and Sayona Mining 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 Sayona Mining Limited are associated (or correlated) with Lithium Americas. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Lithium Americas Corp has no effect on the direction of Sayona Mining i.e., Sayona Mining and Lithium Americas go up and down completely randomly.
Pair Corralation between Sayona Mining and Lithium Americas
Assuming the 90 days horizon Sayona Mining Limited is expected to under-perform the Lithium Americas. In addition to that, Sayona Mining is 2.0 times more volatile than Lithium Americas Corp. It trades about -0.1 of its total potential returns per unit of risk. Lithium Americas Corp is currently generating about -0.17 per unit of volatility. If you would invest 388.00 in Lithium Americas Corp on November 3, 2024 and sell it today you would lose (88.00) from holding Lithium Americas Corp or give up 22.68% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Sayona Mining Limited vs. Lithium Americas Corp
Performance |
| Timeline |
| Sayona Mining Limited |
| Lithium Americas Corp |
Sayona Mining and Lithium Americas Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Sayona Mining and Lithium Americas
The main advantage of trading using opposite Sayona Mining and Lithium Americas positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Sayona Mining position performs unexpectedly, Lithium Americas 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 Lithium Americas will offset losses from the drop in Lithium Americas' long position.| Sayona Mining vs. Portofino Resources | Sayona Mining vs. Core Lithium | Sayona Mining vs. Global Energy Metals | Sayona Mining vs. Clime Investment Management |
| Lithium Americas vs. Sigma Lithium Resources | Lithium Americas vs. Standard Lithium | Lithium Americas vs. Sayona Mining Limited | Lithium Americas 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 Commodity Channel module to use Commodity Channel Index to analyze current equity momentum.
Other Complementary Tools
| Bollinger Bands Use Bollinger Bands indicator to analyze target price for a given investing horizon | |
| Equity Valuation Check real value of public entities based on technical and fundamental data | |
| Global Markets Map Get a quick overview of global market snapshot using zoomable world map. Drill down to check world indexes | |
| ETFs Find actively traded Exchange Traded Funds (ETF) from around the world | |
| Odds Of Bankruptcy Get analysis of equity chance of financial distress in the next 2 years |