Correlation Between LithiumBank Resources and 693304AS6

Can any of the company-specific risk be diversified away by investing in both LithiumBank Resources and 693304AS6 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 693304AS6 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 PECO ENERGY 415, you can compare the effects of market volatilities on LithiumBank Resources and 693304AS6 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 693304AS6. Check out your portfolio center. Please also check ongoing floating volatility patterns of LithiumBank Resources and 693304AS6.

Diversification Opportunities for LithiumBank Resources and 693304AS6

-0.28

Correlation Coefficient

LithiumBank Resources  693304AS6

Very good diversification

The 3 months correlation between LithiumBank and 693304AS6 is -0.28. Overlapping area represents the amount of risk that can be diversified away by holding LithiumBank Resources Corp and PECO ENERGY 415 in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on PECO ENERGY 415 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 693304AS6. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of PECO ENERGY 415 has no effect on the direction of LithiumBank Resources i.e., LithiumBank Resources and 693304AS6 go up and down completely randomly.

Pair Corralation between LithiumBank Resources and 693304AS6

Assuming the 90 days horizon LithiumBank Resources Corp is expected to under-perform the 693304AS6. In addition to that, LithiumBank Resources is 1.46 times more volatile than PECO ENERGY 415. It trades about -0.21 of its total potential returns per unit of risk. PECO ENERGY 415 is currently generating about -0.03 per unit of volatility. If you would invest  9,005  in PECO ENERGY 415 on September 14, 2024 and sell it today you would lose (264.00) from holding PECO ENERGY 415 or give up 2.93% of portfolio value over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Insignificant
Accuracy	46.03%
Values	Daily Returns

LithiumBank Resources Corp  vs.  PECO ENERGY 415

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 fragile 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.

PECO ENERGY 415

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days PECO ENERGY 415 has generated negative risk-adjusted returns adding no value to investors with long positions. Despite somewhat strong basic indicators, 693304AS6 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 693304AS6

The main advantage of trading using opposite LithiumBank Resources and 693304AS6 positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if LithiumBank Resources position performs unexpectedly, 693304AS6 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 693304AS6 will offset losses from the drop in 693304AS6's long position.

The idea behind LithiumBank Resources Corp and PECO ENERGY 415 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.