Correlation Between US GoldMining and Alpha Lithium

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

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

Diversification Opportunities for US GoldMining and Alpha Lithium

0.0

Correlation Coefficient

US GoldMining  Alpha Lithium

Pay attention - limited upside

The 3 months correlation between USGOW and Alpha is 0.0. Overlapping area represents the amount of risk that can be diversified away by holding US GoldMining Warrant 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 US GoldMining 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 US GoldMining Warrant 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 US GoldMining i.e., US GoldMining and Alpha Lithium go up and down completely randomly.

Pair Corralation between US GoldMining and Alpha Lithium

If you would invest  206.00  in US GoldMining Warrant on December 1, 2024 and sell it today you would lose (71.00) from holding US GoldMining Warrant or give up 34.47% of portfolio value over 90 days.

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

US GoldMining Warrant  vs.  Alpha Lithium Corp

US GoldMining Warrant

Risk-Adjusted Performance

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in US GoldMining Warrant are ranked lower than 1 (%) of all global equities and portfolios over the last 90 days. In spite of fairly weak basic indicators, US GoldMining showed solid returns over the last few months and may actually be approaching a breakup point.

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 US GoldMining and Alpha Lithium

The main advantage of trading using opposite US GoldMining and Alpha Lithium positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if US GoldMining 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 US GoldMining Warrant 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 Portfolio File Import module to quickly import all of your third-party portfolios from your local drive in csv format.