Correlation Between GéoMégA Resources and Alpha Lithium

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

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

Diversification Opportunities for GéoMégA Resources and Alpha Lithium

0.0

Correlation Coefficient

GéoMégA Resources  Alpha Lithium

Pay attention - limited upside

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

Pair Corralation between GéoMégA Resources and Alpha Lithium

If you would invest  6.00  in GoMgA Resources on December 19, 2024 and sell it today you would lose (0.46) from holding GoMgA Resources or give up 7.67% of portfolio value over 90 days.

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

GoMgA Resources  vs.  Alpha Lithium Corp

GéoMégA Resources

Risk-Adjusted Performance

Very Weak

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

Alpha Lithium Corp

Risk-Adjusted Performance

Very Weak

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

Pair Trading with GéoMégA Resources and Alpha Lithium

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

The idea behind GoMgA Resources and Alpha 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 Performance Analysis module to check effects of mean-variance optimization against your current asset allocation.