Correlation Between De Grey and Core Lithium

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

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

Diversification Opportunities for De Grey and Core Lithium

-0.14

Correlation Coefficient

De Grey  Core Lithium

Good diversification

The 3 months correlation between DEG and Core is -0.14. Overlapping area represents the amount of risk that can be diversified away by holding De Grey Mining and Core Lithium in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Core Lithium and De Grey 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 De Grey Mining are associated (or correlated) with Core Lithium. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Core Lithium has no effect on the direction of De Grey i.e., De Grey and Core Lithium go up and down completely randomly.

Pair Corralation between De Grey and Core Lithium

Assuming the 90 days trading horizon De Grey Mining is expected to generate 0.44 times more return on investment than Core Lithium. However, De Grey Mining is 2.26 times less risky than Core Lithium. It trades about 0.14 of its potential returns per unit of risk. Core Lithium is currently generating about -0.04 per unit of risk. If you would invest  181.00  in De Grey Mining on December 25, 2024 and sell it today you would earn a total of  28.00  from holding De Grey Mining or generate 15.47% return on investment over 90 days.

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

De Grey Mining  vs.  Core Lithium

De Grey Mining

Risk-Adjusted Performance

Good

Compared to the overall equity markets, risk-adjusted returns on investments in De Grey Mining are ranked lower than 11 (%) of all global equities and portfolios over the last 90 days. In spite of comparatively uncertain technical and fundamental indicators, De Grey unveiled solid returns over the last few months and may actually be approaching a breakup point.

Core Lithium

Risk-Adjusted Performance

Very Weak

Over the last 90 days Core Lithium has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of latest uncertain performance, the Stock's basic indicators remain stable and the newest uproar on Wall Street may also be a sign of mid-term gains for the firm private investors.

Pair Trading with De Grey and Core Lithium

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

The idea behind De Grey Mining and Core Lithium 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 Center module to all portfolio management and optimization tools to improve performance of your portfolios.