Correlation Between Sigma Lithium and Standard Lithium
Can any of the company-specific risk be diversified away by investing in both Sigma Lithium 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 Sigma Lithium and Standard Lithium into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Sigma Lithium Resources and Standard Lithium, you can compare the effects of market volatilities on Sigma Lithium 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 Sigma Lithium with a short position of Standard Lithium. Check out your portfolio center. Please also check ongoing floating volatility patterns of Sigma Lithium and Standard Lithium.
Diversification Opportunities for Sigma Lithium and Standard Lithium
0.55 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Sigma and Standard is 0.55. Overlapping area represents the amount of risk that can be diversified away by holding Sigma Lithium Resources and Standard Lithium in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Standard Lithium and Sigma 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 Sigma Lithium Resources 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 Sigma Lithium i.e., Sigma Lithium and Standard Lithium go up and down completely randomly.
Pair Corralation between Sigma Lithium and Standard Lithium
Given the investment horizon of 90 days Sigma Lithium is expected to generate 8.6 times less return on investment than Standard Lithium. In addition to that, Sigma Lithium is 1.13 times more volatile than Standard Lithium. It trades about 0.02 of its total potential returns per unit of risk. Standard Lithium is currently generating about 0.15 per unit of volatility. If you would invest 260.00 in Standard Lithium on July 26, 2025 and sell it today you would earn a total of 151.00 from holding Standard Lithium or generate 58.08% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Sigma Lithium Resources vs. Standard Lithium
Performance |
| Timeline |
| Sigma Lithium Resources |
| Standard Lithium |
Sigma Lithium and Standard Lithium Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Sigma Lithium and Standard Lithium
The main advantage of trading using opposite Sigma Lithium and Standard Lithium positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Sigma Lithium 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.| Sigma Lithium vs. Nexa Resources SA | Sigma Lithium vs. American Battery Technology | Sigma Lithium vs. NioCorp Developments Ltd | Sigma Lithium vs. Graphjet Technology |
| Standard Lithium vs. Ferroglobe PLC | Standard Lithium vs. TMC the metals | Standard Lithium vs. Compass Minerals International | Standard Lithium vs. Stepan Company |
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 Investing Opportunities module to build portfolios using our predefined set of ideas and optimize them against your investing preferences.
Other Complementary Tools
| Content Syndication Quickly integrate customizable finance content to your own investment portal | |
| Stock Tickers Use high-impact, comprehensive, and customizable stock tickers that can be easily integrated to any websites | |
| AI Portfolio Prophet Use AI to generate optimal portfolios and find profitable investment opportunities | |
| Equity Forecasting Use basic forecasting models to generate price predictions and determine price momentum | |
| Portfolio Rebalancing Analyze risk-adjusted returns against different time horizons to find asset-allocation targets |