Correlation Between C3 Metals and Volt Lithium

Can any of the company-specific risk be diversified away by investing in both C3 Metals and Volt 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 C3 Metals and Volt Lithium into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between C3 Metals and Volt Lithium Corp, you can compare the effects of market volatilities on C3 Metals and Volt 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 C3 Metals with a short position of Volt Lithium. Check out your portfolio center. Please also check ongoing floating volatility patterns of C3 Metals and Volt Lithium.

Diversification Opportunities for C3 Metals and Volt Lithium

0.26

Correlation Coefficient

C3 Metals  Volt Lithium

Modest diversification

The 3 months correlation between CUAUF and Volt is 0.26. Overlapping area represents the amount of risk that can be diversified away by holding C3 Metals and Volt Lithium Corp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Volt Lithium Corp and C3 Metals 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 C3 Metals are associated (or correlated) with Volt Lithium. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Volt Lithium Corp has no effect on the direction of C3 Metals i.e., C3 Metals and Volt Lithium go up and down completely randomly.

Pair Corralation between C3 Metals and Volt Lithium

Assuming the 90 days horizon C3 Metals is expected to generate 1.54 times more return on investment than Volt Lithium. However, C3 Metals is 1.54 times more volatile than Volt Lithium Corp. It trades about 0.17 of its potential returns per unit of risk. Volt Lithium Corp is currently generating about 0.07 per unit of risk. If you would invest  18.00  in C3 Metals on November 29, 2024 and sell it today you would earn a total of  20.00  from holding C3 Metals or generate 111.11% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Very Weak
Accuracy	98.33%
Values	Daily Returns

C3 Metals  vs.  Volt Lithium Corp

C3 Metals

Risk-Adjusted Performance

Good

Compared to the overall equity markets, risk-adjusted returns on investments in C3 Metals are ranked lower than 13 (%) of all global equities and portfolios over the last 90 days. Despite nearly fragile basic indicators, C3 Metals reported solid returns over the last few months and may actually be approaching a breakup point.

Volt Lithium Corp

Risk-Adjusted Performance

Modest

Compared to the overall equity markets, risk-adjusted returns on investments in Volt Lithium Corp are ranked lower than 5 (%) of all global equities and portfolios over the last 90 days. Despite nearly weak essential indicators, Volt Lithium reported solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with C3 Metals and Volt Lithium

The main advantage of trading using opposite C3 Metals and Volt Lithium positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if C3 Metals position performs unexpectedly, Volt 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 Volt Lithium will offset losses from the drop in Volt Lithium's long position.

The idea behind C3 Metals and Volt Lithium Corp 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 Portfolio File Import module to quickly import all of your third-party portfolios from your local drive in csv format.