Correlation Between Grande Portage and Stria Lithium

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

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

Diversification Opportunities for Grande Portage and Stria Lithium

0.53

Correlation Coefficient

Grande Portage  Stria Lithium

Very weak diversification

The 3 months correlation between Grande and Stria is 0.53. Overlapping area represents the amount of risk that can be diversified away by holding Grande Portage Resources and Stria Lithium in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Stria Lithium and Grande Portage 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 Grande Portage Resources are associated (or correlated) with Stria Lithium. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Stria Lithium has no effect on the direction of Grande Portage i.e., Grande Portage and Stria Lithium go up and down completely randomly.

Pair Corralation between Grande Portage and Stria Lithium

Assuming the 90 days horizon Grande Portage Resources is expected to under-perform the Stria Lithium. But the stock apears to be less risky and, when comparing its historical volatility, Grande Portage Resources is 1.33 times less risky than Stria Lithium. The stock trades about -0.18 of its potential returns per unit of risk. The Stria Lithium is currently generating about 0.0 of returns per unit of risk over similar time horizon. If you would invest  7.50  in Stria Lithium on September 25, 2024 and sell it today you would lose (1.00) from holding Stria Lithium or give up 13.33% of portfolio value over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Weak
Accuracy	97.67%
Values	Daily Returns

Grande Portage Resources  vs.  Stria Lithium

Grande Portage Resources

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Grande Portage Resources has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of latest abnormal performance, the Stock's basic indicators remain stable and the latest fuss on Wall Street may also be a sign of long-term gains for the venture sophisticated investors.

Stria Lithium

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Stria Lithium has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of fairly stable basic indicators, Stria Lithium is not utilizing all of its potentials. The latest stock price fuss, may contribute to near-short-term losses for the sophisticated investors.

Pair Trading with Grande Portage and Stria Lithium

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

The idea behind Grande Portage Resources and Stria Lithium 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 Headlines Timeline module to stay connected to all market stories and filter out noise. Drill down to analyze hype elasticity.