Correlation Between Pure Global and US Lithium

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

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

Diversification Opportunities for Pure Global and US Lithium

0.0

Correlation Coefficient

Pure Global  US Lithium

Pay attention - limited upside

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

Pair Corralation between Pure Global and US Lithium

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	99.21%
Values	Daily Returns

Pure Global Cannabis  vs.  US Lithium Corp

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.

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.

Pair Trading with Pure Global and US Lithium

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

The idea behind Pure Global Cannabis and US Lithium Corp 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 Equity Analysis module to research over 250,000 global equities including funds, stocks and ETFs to find investment opportunities.