Correlation Between US Lithium and Pure Global

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

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

Diversification Opportunities for US Lithium and Pure Global

0.0

Correlation Coefficient

US Lithium  Pure Global

Pay attention - limited upside

The 3 months correlation between LITH and Pure is 0.0. Overlapping area represents the amount of risk that can be diversified away by holding US Lithium Corp and Pure Global Cannabis in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Pure Global Cannabis and US 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 US Lithium Corp are associated (or correlated) with Pure Global. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Pure Global Cannabis has no effect on the direction of US Lithium i.e., US Lithium and Pure Global go up and down completely randomly.

Pair Corralation between US Lithium and Pure Global

If you would invest  0.00  in Pure Global Cannabis on September 19, 2024 and sell it today you would earn a total of  0.00  from holding Pure Global Cannabis or generate 0.0% return on investment over 90 days.

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

US Lithium Corp  vs.  Pure Global Cannabis

US Lithium Corp

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days US Lithium Corp has generated negative risk-adjusted returns adding no value to investors with long positions. Despite weak performance in the last few months, the Stock's basic indicators remain fairly strong which may send shares a bit higher in January 2025. The recent confusion may also be a sign of long-lasting up-swing for the firm traders.

Pure Global Cannabis

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Pure Global Cannabis has generated negative risk-adjusted returns adding no value to investors with long positions. Despite nearly stable basic indicators, Pure Global is not utilizing all of its potentials. The current stock price disturbance, may contribute to mid-run losses for the stockholders.

Pair Trading with US Lithium and Pure Global

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

The idea behind US Lithium Corp and Pure Global Cannabis 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 Aroon Oscillator module to analyze current equity momentum using Aroon Oscillator and other momentum ratios.