Correlation Between LithiumBank Resources and Victorias Secret

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

Diversification Opportunities for LithiumBank Resources and Victorias Secret

-0.89

Correlation Coefficient

LithiumBank Resources  Victorias Secret

Pay attention - limited upside

The 3 months correlation between LithiumBank and Victorias is -0.89. Overlapping area represents the amount of risk that can be diversified away by holding LithiumBank Resources Corp and Victorias Secret Co in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Victorias Secret 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 Victorias Secret. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Victorias Secret has no effect on the direction of LithiumBank Resources i.e., LithiumBank Resources and Victorias Secret go up and down completely randomly.

Pair Corralation between LithiumBank Resources and Victorias Secret

Assuming the 90 days horizon LithiumBank Resources is expected to generate 12.04 times less return on investment than Victorias Secret. In addition to that, LithiumBank Resources is 1.01 times more volatile than Victorias Secret Co. It trades about 0.02 of its total potential returns per unit of risk. Victorias Secret Co is currently generating about 0.24 per unit of volatility. If you would invest  3,740  in Victorias Secret Co on September 24, 2024 and sell it today you would earn a total of  756.00  from holding Victorias Secret Co or generate 20.21% return on investment over 90 days.

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

LithiumBank Resources Corp  vs.  Victorias Secret Co

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.

Victorias Secret

Risk-Adjusted Performance

20 of 100

Solid

Compared to the overall equity markets, risk-adjusted returns on investments in Victorias Secret Co are ranked lower than 20 (%) of all global equities and portfolios over the last 90 days. In spite of very unfluctuating fundamental indicators, Victorias Secret displayed solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with LithiumBank Resources and Victorias Secret

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

The idea behind LithiumBank Resources Corp and Victorias Secret Co 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.

Check out your portfolio center.

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 Global Correlations module to find global opportunities by holding instruments from different markets.