Correlation Between Lithium Energi and Tartisan Nickel

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

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

Diversification Opportunities for Lithium Energi and Tartisan Nickel

0.02

Correlation Coefficient

Lithium Energi  Tartisan Nickel

Significant diversification

The 3 months correlation between Lithium and Tartisan is 0.02. Overlapping area represents the amount of risk that can be diversified away by holding Lithium Energi Exploration and Tartisan Nickel Corp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Tartisan Nickel Corp and Lithium Energi 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 Lithium Energi Exploration are associated (or correlated) with Tartisan Nickel. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Tartisan Nickel Corp has no effect on the direction of Lithium Energi i.e., Lithium Energi and Tartisan Nickel go up and down completely randomly.

Pair Corralation between Lithium Energi and Tartisan Nickel

Assuming the 90 days horizon Lithium Energi Exploration is expected to generate 4.06 times more return on investment than Tartisan Nickel. However, Lithium Energi is 4.06 times more volatile than Tartisan Nickel Corp. It trades about 0.06 of its potential returns per unit of risk. Tartisan Nickel Corp is currently generating about 0.05 per unit of risk. If you would invest  14.00  in Lithium Energi Exploration on November 27, 2024 and sell it today you would lose (11.50) from holding Lithium Energi Exploration or give up 82.14% of portfolio value over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Insignificant
Accuracy	99.16%
Values	Daily Returns

Lithium Energi Exploration  vs.  Tartisan Nickel Corp

Lithium Energi Explo

Risk-Adjusted Performance

Modest

Compared to the overall equity markets, risk-adjusted returns on investments in Lithium Energi Exploration are ranked lower than 6 (%) of all global equities and portfolios over the last 90 days. Despite nearly fragile basic indicators, Lithium Energi reported solid returns over the last few months and may actually be approaching a breakup point.

Tartisan Nickel Corp

Risk-Adjusted Performance

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in Tartisan Nickel Corp are ranked lower than 1 (%) of all global equities and portfolios over the last 90 days. Despite nearly weak basic indicators, Tartisan Nickel may actually be approaching a critical reversion point that can send shares even higher in March 2025.

Pair Trading with Lithium Energi and Tartisan Nickel

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

The idea behind Lithium Energi Exploration and Tartisan Nickel 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 CEOs Directory module to screen CEOs from public companies around the world.