Correlation Between Sigma Lithium and Cleveland Cliffs

Specify exactly 2 symbols:
Can any of the company-specific risk be diversified away by investing in both Sigma Lithium and Cleveland Cliffs 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 Cleveland Cliffs 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 Cleveland-Cliffs, you can compare the effects of market volatilities on Sigma Lithium and Cleveland Cliffs 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 Cleveland Cliffs. Check out your portfolio center. Please also check ongoing floating volatility patterns of Sigma Lithium and Cleveland Cliffs.

Diversification Opportunities for Sigma Lithium and Cleveland Cliffs

-0.18
  Correlation Coefficient

Good diversification

The 3 months correlation between Sigma and Cleveland is -0.18. Overlapping area represents the amount of risk that can be diversified away by holding Sigma Lithium Resources and Cleveland-Cliffs in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Cleveland-Cliffs 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 Cleveland Cliffs. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Cleveland-Cliffs has no effect on the direction of Sigma Lithium i.e., Sigma Lithium and Cleveland Cliffs go up and down completely randomly.

Pair Corralation between Sigma Lithium and Cleveland Cliffs

Given the investment horizon of 90 days Sigma Lithium Resources is expected to generate 0.89 times more return on investment than Cleveland Cliffs. However, Sigma Lithium Resources is 1.12 times less risky than Cleveland Cliffs. It trades about 0.16 of its potential returns per unit of risk. Cleveland-Cliffs is currently generating about 0.04 per unit of risk. If you would invest  2,857  in Sigma Lithium Resources on September 10, 2022 and sell it today you would earn a total of  774.00  from holding Sigma Lithium Resources or generate 27.09% return on investment over 90 days.
Time Period3 Months [change]
DirectionMoves Against 
StrengthInsignificant
Accuracy100.0%
ValuesDaily Returns

Sigma Lithium Resources  vs.  Cleveland-Cliffs

 Performance (%) 
       Timeline  
Sigma Lithium Resources 
Sigma Performance
9 of 100
Compared to the overall equity markets, risk-adjusted returns on investments in Sigma Lithium Resources are ranked lower than 9 (%) of all global equities and portfolios over the last 90 days. Even with relatively sluggish primary indicators, Sigma Lithium revealed solid returns over the last few months and may actually be approaching a breakup point.

Sigma Price Channel

Cleveland-Cliffs 
Cleveland Performance
0 of 100
Over the last 90 days Cleveland-Cliffs has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of rather sound essential indicators, Cleveland Cliffs is not utilizing all of its potentials. The newest stock price tumult, may contribute to shorter-term losses for the shareholders.

Cleveland Price Channel

Sigma Lithium and Cleveland Cliffs Volatility Contrast

   Predicted Return Density   
       Returns  

Pair Trading with Sigma Lithium and Cleveland Cliffs

The main advantage of trading using opposite Sigma Lithium and Cleveland Cliffs positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Sigma Lithium position performs unexpectedly, Cleveland Cliffs 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 Cleveland Cliffs will offset losses from the drop in Cleveland Cliffs' long position.
Sigma Lithium vs. LL Flooring Holdings
Sigma Lithium vs. Fiskars Oyj Abp
Sigma Lithium vs. SSLJ
Sigma Lithium vs. Calloways Nursery
The idea behind Sigma Lithium Resources and Cleveland-Cliffs 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.
Cleveland Cliffs vs. Peabody Energy Corp
Cleveland Cliffs vs. Chesapeake Energy Corp
Cleveland Cliffs vs. Commercial Metals
Cleveland Cliffs vs. CNX Resources Corp
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 Portfolio Anywhere module to track or share privately all of your investments from the convenience of any device.

Other Complementary Tools

Portfolio Manager
State of the art Portfolio Manager to monitor and improve performance of your invested capital
Go
Equity Search
Search for actively traded equities including funds and ETFs from over 30 global markets
Go
Portfolio Optimization
Compute new portfolio that will generate highest expected return given your specified tolerance for risk
Go
Options Analysis
Analyze and evaluate options and option chains as a potential hedge for your portfolios
Go
Premium Stories
Follow Macroaxis premium stories from verified contributors across different equity types, categories and coverage scope
Go
Idea Analyzer
Analyze all characteristics, volatility and risk-adjusted return of Macroaxis ideas
Go
Focused Opportunities
Build portfolios using our predefined set of ideas and optimize them against your investing preferences
Go
Global Correlations
Find global opportunities by holding instruments from different markets
Go
Earnings Calls
Check upcoming earnings announcements updated hourly across public exchanges
Go
Headlines Timeline
Stay connected to all market stories and filter out noise. Drill down to analyze hype elasticity
Go
Portfolio Anywhere
Track or share privately all of your investments from the convenience of any device
Go
Companies Directory
Evaluate performance of over 100,000 Stocks, Funds, and ETFs against different fundamentals
Go