Correlation Between Avrupa Minerals and Li Metal
Can any of the company-specific risk be diversified away by investing in both Avrupa Minerals and Li Metal 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 Avrupa Minerals and Li Metal into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Avrupa Minerals and Li Metal Corp, you can compare the effects of market volatilities on Avrupa Minerals and Li Metal 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 Avrupa Minerals with a short position of Li Metal. Check out your portfolio center. Please also check ongoing floating volatility patterns of Avrupa Minerals and Li Metal.
Diversification Opportunities for Avrupa Minerals and Li Metal
-0.18 | Correlation Coefficient |
Good diversification
The 3 months correlation between Avrupa and LIMFF is -0.18. Overlapping area represents the amount of risk that can be diversified away by holding Avrupa Minerals and Li Metal Corp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Li Metal Corp and Avrupa Minerals 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 Avrupa Minerals are associated (or correlated) with Li Metal. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Li Metal Corp has no effect on the direction of Avrupa Minerals i.e., Avrupa Minerals and Li Metal go up and down completely randomly.
Pair Corralation between Avrupa Minerals and Li Metal
Assuming the 90 days horizon Avrupa Minerals is expected to generate 1.68 times more return on investment than Li Metal. However, Avrupa Minerals is 1.68 times more volatile than Li Metal Corp. It trades about 0.19 of its potential returns per unit of risk. Li Metal Corp is currently generating about 0.09 per unit of risk. If you would invest 1.30 in Avrupa Minerals on August 17, 2025 and sell it today you would earn a total of 0.59 from holding Avrupa Minerals or generate 45.38% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 98.46% |
| Values | Daily Returns |
Avrupa Minerals vs. Li Metal Corp
Performance |
| Timeline |
| Avrupa Minerals |
| Li Metal Corp |
Avrupa Minerals and Li Metal Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Avrupa Minerals and Li Metal
The main advantage of trading using opposite Avrupa Minerals and Li Metal positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Avrupa Minerals position performs unexpectedly, Li Metal 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 Li Metal will offset losses from the drop in Li Metal's long position.| Avrupa Minerals vs. South Star Battery | Avrupa Minerals vs. Pacific Empire Minerals | Avrupa Minerals vs. Decade Resources | Avrupa Minerals vs. Tempus Resources Limited |
| Li Metal vs. Bushveld Minerals Limited | Li Metal vs. Atico Mining | Li Metal vs. Western Resources Corp | Li Metal vs. Sun Summit Minerals |
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 Pair Correlation module to compare performance and examine fundamental relationship between any two equity instruments.
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