Correlation Between Village Super and Nova Lithium
Can any of the company-specific risk be diversified away by investing in both Village Super and Nova 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 Village Super and Nova Lithium into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Village Super Market and Nova Lithium Corp, you can compare the effects of market volatilities on Village Super and Nova 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 Village Super with a short position of Nova Lithium. Check out your portfolio center. Please also check ongoing floating volatility patterns of Village Super and Nova Lithium.
Diversification Opportunities for Village Super and Nova Lithium
-0.07 | Correlation Coefficient |
Good diversification
The 3 months correlation between Village and Nova is -0.07. Overlapping area represents the amount of risk that can be diversified away by holding Village Super Market and Nova Lithium Corp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Nova Lithium Corp and Village Super 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 Village Super Market are associated (or correlated) with Nova Lithium. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Nova Lithium Corp has no effect on the direction of Village Super i.e., Village Super and Nova Lithium go up and down completely randomly.
Pair Corralation between Village Super and Nova Lithium
Assuming the 90 days horizon Village Super is expected to generate 7.46 times less return on investment than Nova Lithium. But when comparing it to its historical volatility, Village Super Market is 3.55 times less risky than Nova Lithium. It trades about 0.05 of its potential returns per unit of risk. Nova Lithium Corp is currently generating about 0.1 of returns per unit of risk over similar time horizon. If you would invest 26.00 in Nova Lithium Corp on October 26, 2024 and sell it today you would earn a total of 5.00 from holding Nova Lithium Corp or generate 19.23% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 97.5% |
| Values | Daily Returns |
Village Super Market vs. Nova Lithium Corp
Performance |
| Timeline |
| Village Super Market |
| Nova Lithium Corp |
Village Super and Nova Lithium Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Village Super and Nova Lithium
The main advantage of trading using opposite Village Super and Nova Lithium positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Village Super position performs unexpectedly, Nova 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 Nova Lithium will offset losses from the drop in Nova Lithium's long position.| Village Super vs. Ingles Markets Incorporated | Village Super vs. Natural Grocers by | Village Super vs. Grocery Outlet Holding | Village Super vs. Weis Markets |
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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 Portfolio Rebalancing module to analyze risk-adjusted returns against different time horizons to find asset-allocation targets.
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