Correlation Between United Lithium and Placer Creek
Can any of the company-specific risk be diversified away by investing in both United Lithium and Placer Creek 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 United Lithium and Placer Creek into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between United Lithium Corp and Placer Creek Mining, you can compare the effects of market volatilities on United Lithium and Placer Creek 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 United Lithium with a short position of Placer Creek. Check out your portfolio center. Please also check ongoing floating volatility patterns of United Lithium and Placer Creek.
Diversification Opportunities for United Lithium and Placer Creek
0.0 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between United and Placer is 0.0. Overlapping area represents the amount of risk that can be diversified away by holding United Lithium Corp and Placer Creek Mining in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Placer Creek Mining and United 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 United Lithium Corp are associated (or correlated) with Placer Creek. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Placer Creek Mining has no effect on the direction of United Lithium i.e., United Lithium and Placer Creek go up and down completely randomly.
Pair Corralation between United Lithium and Placer Creek
If you would invest 72.00 in United Lithium Corp on August 25, 2024 and sell it today you would lose (59.00) from holding United Lithium Corp or give up 81.94% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Flat |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
United Lithium Corp vs. Placer Creek Mining
Performance |
| Timeline |
| United Lithium Corp |
| Placer Creek Mining |
United Lithium and Placer Creek Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with United Lithium and Placer Creek
The main advantage of trading using opposite United Lithium and Placer Creek positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if United Lithium position performs unexpectedly, Placer Creek 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 Placer Creek will offset losses from the drop in Placer Creek's long position.| United Lithium vs. Alpha Copper Corp | United Lithium vs. REDFLEX HOLDINGS LTD | United Lithium vs. Global Helium Corp | United Lithium vs. Ridgestone Mining |
| Placer Creek vs. Norra Metals Corp | Placer Creek vs. Amarc Resources | Placer Creek vs. ZincX Resources Corp | Placer Creek vs. Nuinsco Resources 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 ETFs module to find actively traded Exchange Traded Funds (ETF) from around the world.
Other Complementary Tools
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| Correlation Analysis Reduce portfolio risk simply by holding instruments which are not perfectly correlated |