Correlation Between Lithium Americas and Tortoise

Can any of the company-specific risk be diversified away by investing in both Lithium Americas and Tortoise 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 Americas and Tortoise into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between Lithium Americas Corp and Tortoise, you can compare the effects of market volatilities on Lithium Americas and Tortoise 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 Americas with a short position of Tortoise. Check out your portfolio center. Please also check ongoing floating volatility patterns of Lithium Americas and Tortoise.

Diversification Opportunities for Lithium Americas and Tortoise

0.17

Correlation Coefficient

Lithium Americas  Tortoise

Average diversification

The 3 months correlation between Lithium and Tortoise is 0.17. Overlapping area represents the amount of risk that can be diversified away by holding Lithium Americas Corp and Tortoise in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Tortoise and Lithium Americas 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 Americas Corp are associated (or correlated) with Tortoise. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Tortoise has no effect on the direction of Lithium Americas i.e., Lithium Americas and Tortoise go up and down completely randomly.

Pair Corralation between Lithium Americas and Tortoise

If you would invest  4,295  in Tortoise on February 22, 2024 and sell it today you would earn a total of  0.00  from holding Tortoise or generate 0.0% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Insignificant
Accuracy	4.35%
Values	Daily Returns

Lithium Americas Corp  vs.  Tortoise

Lithium Americas Corp

Risk-Adjusted Performance

1 of 100

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in Lithium Americas Corp are ranked lower than 1 (%) of all global equities and portfolios over the last 90 days. In spite of rather fragile basic indicators, Lithium Americas may actually be approaching a critical reversion point that can send shares even higher in June 2024.

Tortoise

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Tortoise has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of comparatively stable essential indicators, Tortoise is not utilizing all of its potentials. The current stock price uproar, may contribute to short-horizon losses for the private investors.

Pair Trading with Lithium Americas and Tortoise

The main advantage of trading using opposite Lithium Americas and Tortoise positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Lithium Americas position performs unexpectedly, Tortoise 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 Tortoise will offset losses from the drop in Tortoise's long position.

The idea behind Lithium Americas Corp and Tortoise pairs trading is to make the combined position market-neutral, meaning the overall market's direction will not affect its win or loss (or potential downside or upside). This can be achieved by designing a pairs trade with two highly correlated stocks or equities that operate in a similar space or sector, making it possible to obtain profits through simple and relatively low-risk investment.

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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 Earnings Calls module to check upcoming earnings announcements updated hourly across public exchanges.