Correlation Between Imperial Metals and Standard Lithium
Can any of the company-specific risk be diversified away by investing in both Imperial Metals and Standard 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 Imperial Metals and Standard Lithium into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Imperial Metals and Standard Lithium, you can compare the effects of market volatilities on Imperial Metals and Standard 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 Imperial Metals with a short position of Standard Lithium. Check out your portfolio center. Please also check ongoing floating volatility patterns of Imperial Metals and Standard Lithium.
Diversification Opportunities for Imperial Metals and Standard Lithium
0.57 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Imperial and Standard is 0.57. Overlapping area represents the amount of risk that can be diversified away by holding Imperial Metals and Standard Lithium in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Standard Lithium and Imperial Metals 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 Imperial Metals are associated (or correlated) with Standard Lithium. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Standard Lithium has no effect on the direction of Imperial Metals i.e., Imperial Metals and Standard Lithium go up and down completely randomly.
Pair Corralation between Imperial Metals and Standard Lithium
Assuming the 90 days trading horizon Imperial Metals is expected to generate 1.39 times less return on investment than Standard Lithium. But when comparing it to its historical volatility, Imperial Metals is 2.06 times less risky than Standard Lithium. It trades about 0.2 of its potential returns per unit of risk. Standard Lithium is currently generating about 0.14 of returns per unit of risk over similar time horizon. If you would invest 400.00 in Standard Lithium on September 3, 2025 and sell it today you would earn a total of 220.00 from holding Standard Lithium or generate 55.0% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Imperial Metals vs. Standard Lithium
Performance |
| Timeline |
| Imperial Metals |
| Standard Lithium |
Imperial Metals and Standard Lithium Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Imperial Metals and Standard Lithium
The main advantage of trading using opposite Imperial Metals and Standard Lithium positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Imperial Metals position performs unexpectedly, Standard 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 Standard Lithium will offset losses from the drop in Standard Lithium's long position.| Imperial Metals vs. Atrium Mortgage Investment | Imperial Metals vs. Doman Building Materials | Imperial Metals vs. Westshore Terminals Investment | Imperial Metals vs. Applied Materials, |
| Standard Lithium vs. Domestic Metals Corp | Standard Lithium vs. Upstart Investments | Standard Lithium vs. Global Crossing Airlines | Standard Lithium vs. Labrador Iron Ore |
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 Portfolio Dashboard module to portfolio dashboard that provides centralized access to all your investments.
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