Correlation Between Glen Eagle and American Lithium

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

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

Diversification Opportunities for Glen Eagle and American Lithium

0.0

Correlation Coefficient

Glen Eagle  American Lithium

Pay attention - limited upside

The 3 months correlation between Glen and American is 0.0. Overlapping area represents the amount of risk that can be diversified away by holding Glen Eagle Resources and American Lithium Corp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on American Lithium Corp and Glen Eagle 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 Glen Eagle Resources are associated (or correlated) with American Lithium. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of American Lithium Corp has no effect on the direction of Glen Eagle i.e., Glen Eagle and American Lithium go up and down completely randomly.

Pair Corralation between Glen Eagle and American Lithium

If you would invest (100.00) in American Lithium Corp on November 29, 2024 and sell it today you would earn a total of  100.00  from holding American Lithium Corp or generate -100.0% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Flat
Strength	Insignificant
Accuracy	0.0%
Values	Daily Returns

Glen Eagle Resources  vs.  American Lithium Corp

Glen Eagle Resources

Risk-Adjusted Performance

Very Weak

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

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 essential indicators, American Lithium is not utilizing all of its potentials. The recent stock price disturbance, may contribute to mid-run losses for the stockholders.

Pair Trading with Glen Eagle and American Lithium

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

The idea behind Glen Eagle Resources and American 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.

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 Correlation Analysis module to reduce portfolio risk simply by holding instruments which are not perfectly correlated.