Correlation Between Sayona Mining and Lithium Power

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

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

Diversification Opportunities for Sayona Mining and Lithium Power

0.0

Correlation Coefficient

Sayona Mining  Lithium Power

Pay attention - limited upside

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

Pair Corralation between Sayona Mining and Lithium Power

If you would invest  1.70  in Sayona Mining Limited on December 22, 2024 and sell it today you would lose (0.32) from holding Sayona Mining Limited or give up 18.82% of portfolio value over 90 days.

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

Sayona Mining Limited  vs.  Lithium Power International

Sayona Mining Limited

Risk-Adjusted Performance

Very Weak

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

Lithium Power Intern

Risk-Adjusted Performance

Very Weak

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

Pair Trading with Sayona Mining and Lithium Power

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

The idea behind Sayona Mining Limited and Lithium Power International 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 Efficient Frontier module to plot and analyze your portfolio and positions against risk-return landscape of the market..