Correlation Between Core Lithium and Karam Minerals

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

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

Diversification Opportunities for Core Lithium and Karam Minerals

-0.61

Correlation Coefficient

Core Lithium  Karam Minerals

Excellent diversification

The 3 months correlation between Core and Karam is -0.61. Overlapping area represents the amount of risk that can be diversified away by holding Core Lithium and Karam Minerals in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Karam Minerals and Core 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 Core Lithium are associated (or correlated) with Karam Minerals. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Karam Minerals has no effect on the direction of Core Lithium i.e., Core Lithium and Karam Minerals go up and down completely randomly.

Pair Corralation between Core Lithium and Karam Minerals

If you would invest  5.26  in Core Lithium on October 26, 2024 and sell it today you would earn a total of  1.64  from holding Core Lithium or generate 31.18% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Weak
Accuracy	5.0%
Values	Daily Returns

Core Lithium  vs.  Karam Minerals

Core Lithium

Risk-Adjusted Performance

2 of 100

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in Core Lithium are ranked lower than 2 (%) of all global equities and portfolios over the last 90 days. Despite nearly fragile basic indicators, Core Lithium reported solid returns over the last few months and may actually be approaching a breakup point.

Karam Minerals

Risk-Adjusted Performance

0 of 100

Very Weak

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

Pair Trading with Core Lithium and Karam Minerals

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

The idea behind Core Lithium and Karam Minerals 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 Money Managers module to screen money managers from public funds and ETFs managed around the world.