Correlation Between Thorney Technologies and Lithium Australia
Can any of the company-specific risk be diversified away by investing in both Thorney Technologies and Lithium Australia 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 Thorney Technologies and Lithium Australia into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Thorney Technologies and Lithium Australia NL, you can compare the effects of market volatilities on Thorney Technologies and Lithium Australia 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 Thorney Technologies with a short position of Lithium Australia. Check out your portfolio center. Please also check ongoing floating volatility patterns of Thorney Technologies and Lithium Australia.
Diversification Opportunities for Thorney Technologies and Lithium Australia
-0.08 | Correlation Coefficient |
Good diversification
The 3 months correlation between Thorney and Lithium is -0.08. Overlapping area represents the amount of risk that can be diversified away by holding Thorney Technologies and Lithium Australia NL in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Lithium Australia and Thorney Technologies 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 Thorney Technologies are associated (or correlated) with Lithium Australia. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Lithium Australia has no effect on the direction of Thorney Technologies i.e., Thorney Technologies and Lithium Australia go up and down completely randomly.
Pair Corralation between Thorney Technologies and Lithium Australia
Assuming the 90 days trading horizon Thorney Technologies is expected to generate 0.97 times more return on investment than Lithium Australia. However, Thorney Technologies is 1.03 times less risky than Lithium Australia. It trades about 0.02 of its potential returns per unit of risk. Lithium Australia NL is currently generating about -0.09 per unit of risk. If you would invest 14.00 in Thorney Technologies on September 4, 2024 and sell it today you would earn a total of 0.00 from holding Thorney Technologies or generate 0.0% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 98.46% |
| Values | Daily Returns |
Thorney Technologies vs. Lithium Australia NL
Performance |
| Timeline |
| Thorney Technologies |
| Lithium Australia |
Thorney Technologies and Lithium Australia Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Thorney Technologies and Lithium Australia
The main advantage of trading using opposite Thorney Technologies and Lithium Australia positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Thorney Technologies position performs unexpectedly, Lithium Australia 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 Australia will offset losses from the drop in Lithium Australia's long position.| Thorney Technologies vs. Westpac Banking | Thorney Technologies vs. ABACUS STORAGE KING | Thorney Technologies vs. Odyssey Energy | Thorney Technologies vs. JB Hi Fi |
| Lithium Australia vs. Advanced Braking Technology | Lithium Australia vs. Genetic Technologies | Lithium Australia vs. Thorney Technologies | Lithium Australia vs. Energy Technologies 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 FinTech Suite module to use AI to screen and filter profitable investment opportunities.
Other Complementary Tools
| Positions Ratings Determine portfolio positions ratings based on digital equity recommendations. Macroaxis instant position ratings are based on combination of fundamental analysis and risk-adjusted market performance | |
| Portfolio File Import Quickly import all of your third-party portfolios from your local drive in csv format | |
| Commodity Directory Find actively traded commodities issued by global exchanges | |
| Sectors List of equity sectors categorizing publicly traded companies based on their primary business activities | |
| Efficient Frontier Plot and analyze your portfolio and positions against risk-return landscape of the market. |