Correlation Between American Lithium and COPAUR MINERALS

Can any of the company-specific risk be diversified away by investing in both American Lithium and COPAUR MINERALS 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 American Lithium and COPAUR MINERALS into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between American Lithium Corp and COPAUR MINERALS INC, you can compare the effects of market volatilities on American Lithium and COPAUR MINERALS 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 American Lithium with a short position of COPAUR MINERALS. Check out your portfolio center. Please also check ongoing floating volatility patterns of American Lithium and COPAUR MINERALS.

Diversification Opportunities for American Lithium and COPAUR MINERALS

-0.45

Correlation Coefficient

American Lithium  COPAUR MINERALS

Very good diversification

The 3 months correlation between American and COPAUR is -0.45. Overlapping area represents the amount of risk that can be diversified away by holding American Lithium Corp and COPAUR MINERALS INC in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on COPAUR MINERALS INC and American 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 American Lithium Corp are associated (or correlated) with COPAUR MINERALS. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of COPAUR MINERALS INC has no effect on the direction of American Lithium i.e., American Lithium and COPAUR MINERALS go up and down completely randomly.

Pair Corralation between American Lithium and COPAUR MINERALS

Assuming the 90 days trading horizon American Lithium Corp is expected to under-perform the COPAUR MINERALS. In addition to that, American Lithium is 1.01 times more volatile than COPAUR MINERALS INC. It trades about 0.0 of its total potential returns per unit of risk. COPAUR MINERALS INC is currently generating about 0.09 per unit of volatility. If you would invest  6.16  in COPAUR MINERALS INC on December 22, 2024 and sell it today you would earn a total of  1.88  from holding COPAUR MINERALS INC or generate 30.52% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Very Weak
Accuracy	98.36%
Values	Daily Returns

American Lithium Corp  vs.  COPAUR MINERALS INC

American Lithium Corp

Risk-Adjusted Performance

Very Weak

Over the last 90 days American Lithium Corp has generated negative risk-adjusted returns adding no value to investors with long positions. Despite nearly stable basic indicators, American Lithium is not utilizing all of its potentials. The current stock price disturbance, may contribute to mid-run losses for the stockholders.

COPAUR MINERALS INC

Risk-Adjusted Performance

OK

Compared to the overall equity markets, risk-adjusted returns on investments in COPAUR MINERALS INC are ranked lower than 7 (%) of all global equities and portfolios over the last 90 days. Despite nearly unsteady fundamental indicators, COPAUR MINERALS reported solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with American Lithium and COPAUR MINERALS

The main advantage of trading using opposite American Lithium and COPAUR MINERALS positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if American Lithium position performs unexpectedly, COPAUR MINERALS 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 COPAUR MINERALS will offset losses from the drop in COPAUR MINERALS's long position.

The idea behind American Lithium Corp and COPAUR MINERALS INC pairs trading is to make the combined position market-neutral, meaning the overall market's direction will not affect its win or loss (or potential downside or upside). This can be achieved by designing a pairs trade with two highly correlated stocks or equities that operate in a similar space or sector, making it possible to obtain profits through simple and relatively low-risk investment.

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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 Equity Analysis module to research over 250,000 global equities including funds, stocks and ETFs to find investment opportunities.