Correlation Between Lithium Ionic and NextSource Materials
Can any of the company-specific risk be diversified away by investing in both Lithium Ionic and NextSource Materials 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 Lithium Ionic and NextSource Materials into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Lithium Ionic Corp and NextSource Materials, you can compare the effects of market volatilities on Lithium Ionic and NextSource Materials 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 Lithium Ionic with a short position of NextSource Materials. Check out your portfolio center. Please also check ongoing floating volatility patterns of Lithium Ionic and NextSource Materials.
Diversification Opportunities for Lithium Ionic and NextSource Materials
-0.39 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Lithium and NextSource is -0.39. Overlapping area represents the amount of risk that can be diversified away by holding Lithium Ionic Corp and NextSource Materials in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on NextSource Materials and Lithium Ionic 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 Lithium Ionic Corp are associated (or correlated) with NextSource Materials. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of NextSource Materials has no effect on the direction of Lithium Ionic i.e., Lithium Ionic and NextSource Materials go up and down completely randomly.
Pair Corralation between Lithium Ionic and NextSource Materials
Assuming the 90 days horizon Lithium Ionic Corp is expected to generate 0.8 times more return on investment than NextSource Materials. However, Lithium Ionic Corp is 1.25 times less risky than NextSource Materials. It trades about 0.13 of its potential returns per unit of risk. NextSource Materials is currently generating about -0.15 per unit of risk. If you would invest 80.00 in Lithium Ionic Corp on October 5, 2025 and sell it today you would earn a total of 25.00 from holding Lithium Ionic Corp or generate 31.25% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Lithium Ionic Corp vs. NextSource Materials
Performance |
| Timeline |
| Lithium Ionic Corp |
| NextSource Materials |
Lithium Ionic and NextSource Materials Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Lithium Ionic and NextSource Materials
The main advantage of trading using opposite Lithium Ionic and NextSource Materials positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Lithium Ionic position performs unexpectedly, NextSource Materials 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 NextSource Materials will offset losses from the drop in NextSource Materials' long position.| Lithium Ionic vs. Northcliff Resources | Lithium Ionic vs. Silver X Mining | Lithium Ionic vs. Pulsar Helium | Lithium Ionic vs. Rock Tech Lithium |
| NextSource Materials vs. Arizona Metals Corp | NextSource Materials vs. Group Eleven Resources | NextSource Materials vs. Cordoba Minerals Corp | NextSource Materials vs. GR Silver Mining |
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 AI Portfolio Prophet module to use AI to generate optimal portfolios and find profitable investment opportunities.
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