Correlation Between LithiumBank Resources and Jutal Offshore

Can any of the company-specific risk be diversified away by investing in both LithiumBank Resources and Jutal Offshore 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 LithiumBank Resources and Jutal Offshore into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between LithiumBank Resources Corp and Jutal Offshore Oil, you can compare the effects of market volatilities on LithiumBank Resources and Jutal Offshore 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 LithiumBank Resources with a short position of Jutal Offshore. Check out your portfolio center. Please also check ongoing floating volatility patterns of LithiumBank Resources and Jutal Offshore.

Diversification Opportunities for LithiumBank Resources and Jutal Offshore

0.63

Correlation Coefficient

LithiumBank Resources  Jutal Offshore

Poor diversification

The 3 months correlation between LithiumBank and Jutal is 0.63. Overlapping area represents the amount of risk that can be diversified away by holding LithiumBank Resources Corp and Jutal Offshore Oil in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Jutal Offshore Oil and LithiumBank Resources 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 LithiumBank Resources Corp are associated (or correlated) with Jutal Offshore. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Jutal Offshore Oil has no effect on the direction of LithiumBank Resources i.e., LithiumBank Resources and Jutal Offshore go up and down completely randomly.

Pair Corralation between LithiumBank Resources and Jutal Offshore

Assuming the 90 days horizon LithiumBank Resources Corp is expected to generate 71.73 times more return on investment than Jutal Offshore. However, LithiumBank Resources is 71.73 times more volatile than Jutal Offshore Oil. It trades about 0.02 of its potential returns per unit of risk. Jutal Offshore Oil is currently generating about -0.22 per unit of risk. If you would invest  20.00  in LithiumBank Resources Corp on September 24, 2024 and sell it today you would earn a total of  0.00  from holding LithiumBank Resources Corp or generate 0.0% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Significant
Accuracy	95.24%
Values	Daily Returns

LithiumBank Resources Corp  vs.  Jutal Offshore Oil

LithiumBank Resources

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days LithiumBank Resources Corp has generated negative risk-adjusted returns adding no value to investors with long positions. Despite unfluctuating performance in the last few months, the Stock's forward-looking signals remain nearly stable which may send shares a bit higher in January 2025. The current disturbance may also be a sign of long-run up-swing for the company stockholders.

Jutal Offshore Oil

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Jutal Offshore Oil has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of fairly strong basic indicators, Jutal Offshore is not utilizing all of its potentials. The recent stock price disturbance, may contribute to short-term losses for the investors.

Pair Trading with LithiumBank Resources and Jutal Offshore

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

The idea behind LithiumBank Resources Corp and Jutal Offshore Oil 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 Companies Directory module to evaluate performance of over 100,000 Stocks, Funds, and ETFs against different fundamentals.