Correlation Between Norvista Capital and Sigma Lithium

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

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

Diversification Opportunities for Norvista Capital and Sigma Lithium

0.0

Correlation Coefficient

Norvista Capital  Sigma Lithium

Pay attention - limited upside

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

Pair Corralation between Norvista Capital and Sigma Lithium

If you would invest  1,117  in Sigma Lithium Resources on December 21, 2024 and sell it today you would earn a total of  51.00  from holding Sigma Lithium Resources or generate 4.57% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Flat
Strength	Insignificant
Accuracy	95.24%
Values	Daily Returns

Norvista Capital  vs.  Sigma Lithium Resources

Norvista Capital

Risk-Adjusted Performance

Very Weak

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

Sigma Lithium Resources

Risk-Adjusted Performance

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in Sigma Lithium Resources are ranked lower than 3 (%) of all global equities and portfolios over the last 90 days. Despite quite conflicting primary indicators, Sigma Lithium may actually be approaching a critical reversion point that can send shares even higher in April 2025.

Pair Trading with Norvista Capital and Sigma Lithium

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

The idea behind Norvista Capital and Sigma Lithium Resources 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 Price Ceiling Movement module to calculate and plot Price Ceiling Movement for different equity instruments.