Correlation Between Patagonia Lithium and DUG Technology
Can any of the company-specific risk be diversified away by investing in both Patagonia Lithium and DUG Technology 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 Patagonia Lithium and DUG Technology into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Patagonia Lithium and DUG Technology, you can compare the effects of market volatilities on Patagonia Lithium and DUG Technology 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 Patagonia Lithium with a short position of DUG Technology. Check out your portfolio center. Please also check ongoing floating volatility patterns of Patagonia Lithium and DUG Technology.
Diversification Opportunities for Patagonia Lithium and DUG Technology
0.52 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Patagonia and DUG is 0.52. Overlapping area represents the amount of risk that can be diversified away by holding Patagonia Lithium and DUG Technology in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on DUG Technology and Patagonia Lithium 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 Patagonia Lithium are associated (or correlated) with DUG Technology. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of DUG Technology has no effect on the direction of Patagonia Lithium i.e., Patagonia Lithium and DUG Technology go up and down completely randomly.
Pair Corralation between Patagonia Lithium and DUG Technology
Assuming the 90 days trading horizon Patagonia Lithium is expected to generate 1.39 times less return on investment than DUG Technology. In addition to that, Patagonia Lithium is 1.69 times more volatile than DUG Technology. It trades about 0.11 of its total potential returns per unit of risk. DUG Technology is currently generating about 0.26 per unit of volatility. If you would invest 135.00 in DUG Technology on July 19, 2025 and sell it today you would earn a total of 137.00 from holding DUG Technology or generate 101.48% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 98.46% |
| Values | Daily Returns |
Patagonia Lithium vs. DUG Technology
Performance |
| Timeline |
| Patagonia Lithium |
| DUG Technology |
Patagonia Lithium and DUG Technology Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Patagonia Lithium and DUG Technology
The main advantage of trading using opposite Patagonia Lithium and DUG Technology positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Patagonia Lithium position performs unexpectedly, DUG Technology 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 DUG Technology will offset losses from the drop in DUG Technology's long position.| Patagonia Lithium vs. Australian Agricultural | Patagonia Lithium vs. COG Financial Services | Patagonia Lithium vs. Australian Unity Office | Patagonia Lithium vs. Insignia Financial |
| DUG Technology vs. Dexus Convenience Retail | DUG Technology vs. Charter Hall Retail | DUG Technology vs. Sports Entertainment Group | DUG Technology vs. Great Southern 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 Pattern Recognition module to use different Pattern Recognition models to time the market across multiple global exchanges.
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