Correlation Between Core Lithium and Tartisan Nickel

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

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

Diversification Opportunities for Core Lithium and Tartisan Nickel

-0.09

Correlation Coefficient

Core Lithium  Tartisan Nickel

Good diversification

The 3 months correlation between Core and Tartisan is -0.09. Overlapping area represents the amount of risk that can be diversified away by holding Core Lithium 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 Core Lithium 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 Core Lithium 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 Core Lithium i.e., Core Lithium and Tartisan Nickel go up and down completely randomly.

Pair Corralation between Core Lithium and Tartisan Nickel

Assuming the 90 days horizon Core Lithium is expected to generate 3.08 times more return on investment than Tartisan Nickel. However, Core Lithium is 3.08 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 0.1 per unit of risk. If you would invest  5.75  in Core Lithium on September 15, 2024 and sell it today you would lose (0.27) from holding Core Lithium or give up 4.7% of portfolio value over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Insignificant
Accuracy	100.0%
Values	Daily Returns

Core Lithium  vs.  Tartisan Nickel Corp

Core Lithium

Risk-Adjusted Performance

4 of 100

Insignificant

Compared to the overall equity markets, risk-adjusted returns on investments in Core Lithium are ranked lower than 4 (%) of all global equities and portfolios over the last 90 days. Despite nearly fragile basic indicators, Core Lithium reported solid returns over the last few months and may actually be approaching a breakup point.

Tartisan Nickel Corp

Risk-Adjusted Performance

7 of 100

Insignificant

Compared to the overall equity markets, risk-adjusted returns on investments in Tartisan Nickel Corp are ranked lower than 7 (%) of all global equities and portfolios over the last 90 days. Despite nearly fragile basic indicators, Tartisan Nickel reported solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Core Lithium and Tartisan Nickel

The main advantage of trading using opposite Core Lithium and Tartisan Nickel positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Core Lithium 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 Core Lithium 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 ETFs module to find actively traded Exchange Traded Funds (ETF) from around the world.