Correlation Between Standard Lithium and Trilogy Metals
Can any of the company-specific risk be diversified away by investing in both Standard Lithium and Trilogy Metals 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 Standard Lithium and Trilogy Metals into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Standard Lithium and Trilogy Metals, you can compare the effects of market volatilities on Standard Lithium and Trilogy Metals 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 Standard Lithium with a short position of Trilogy Metals. Check out your portfolio center. Please also check ongoing floating volatility patterns of Standard Lithium and Trilogy Metals.
Diversification Opportunities for Standard Lithium and Trilogy Metals
-0.46 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Standard and Trilogy is -0.46. Overlapping area represents the amount of risk that can be diversified away by holding Standard Lithium and Trilogy Metals in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Trilogy Metals and Standard 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 Standard Lithium are associated (or correlated) with Trilogy Metals. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Trilogy Metals has no effect on the direction of Standard Lithium i.e., Standard Lithium and Trilogy Metals go up and down completely randomly.
Pair Corralation between Standard Lithium and Trilogy Metals
Considering the 90-day investment horizon Standard Lithium is expected to under-perform the Trilogy Metals. But the stock apears to be less risky and, when comparing its historical volatility, Standard Lithium is 1.28 times less risky than Trilogy Metals. The stock trades about -0.01 of its potential returns per unit of risk. The Trilogy Metals is currently generating about 0.05 of returns per unit of risk over similar time horizon. If you would invest 64.00 in Trilogy Metals on March 23, 2025 and sell it today you would earn a total of 72.00 from holding Trilogy Metals or generate 112.5% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Standard Lithium vs. Trilogy Metals
Performance |
| Timeline |
| Standard Lithium |
| Trilogy Metals |
Standard Lithium and Trilogy Metals Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Standard Lithium and Trilogy Metals
The main advantage of trading using opposite Standard Lithium and Trilogy Metals positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Standard Lithium position performs unexpectedly, Trilogy Metals 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 Trilogy Metals will offset losses from the drop in Trilogy Metals' long position.| Standard Lithium vs. Piedmont Lithium Ltd | Standard Lithium vs. Teck Resources Ltd | Standard Lithium vs. Sigma Lithium Resources | Standard Lithium vs. MP Materials Corp |
| Trilogy Metals vs. Fury Gold Mines | Trilogy Metals vs. EMX Royalty Corp | Trilogy Metals vs. Western Copper and | Trilogy Metals vs. Nevada King Gold |
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 Price Ceiling Movement module to calculate and plot Price Ceiling Movement for different equity instruments.
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