Correlation Between Er Therapeutics and Sigma Lithium

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

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

Diversification Opportunities for Er Therapeutics and Sigma Lithium

0.0

Correlation Coefficient

Er Therapeutics  Sigma Lithium

Pay attention - limited upside

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

Pair Corralation between Er Therapeutics and Sigma Lithium

If you would invest  0.01  in Er Therapeutics on September 26, 2024 and sell it today you would earn a total of  0.00  from holding Er Therapeutics or generate 0.0% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Flat
Strength	Insignificant
Accuracy	98.44%
Values	Daily Returns

Er Therapeutics  vs.  Sigma Lithium Resources

Er Therapeutics

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Er Therapeutics has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of very healthy technical and fundamental indicators, Er Therapeutics is not utilizing all of its potentials. The current stock price disarray, may contribute to short-term losses for the investors.

Sigma Lithium Resources

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Sigma Lithium Resources has generated negative risk-adjusted returns adding no value to investors with long positions. Despite latest conflicting performance, the Stock's primary indicators remain persistent and the latest mess on Wall Street may also be a sign of long-standing gains for the company institutional investors.

Pair Trading with Er Therapeutics and Sigma Lithium

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

The idea behind Er Therapeutics and Sigma Lithium Resources 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 Portfolio Comparator module to compare the composition, asset allocations and performance of any two portfolios in your account.