Correlation Between Alpha Lithium and Ioneer

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

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

Diversification Opportunities for Alpha Lithium and Ioneer

0.44

Correlation Coefficient

Alpha Lithium  Ioneer

Very weak diversification

The 3 months correlation between Alpha and Ioneer is 0.44. Overlapping area represents the amount of risk that can be diversified away by holding Alpha Lithium and ioneer in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on ioneer and Alpha 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 Alpha Lithium are associated (or correlated) with Ioneer. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of ioneer has no effect on the direction of Alpha Lithium i.e., Alpha Lithium and Ioneer go up and down completely randomly.

Pair Corralation between Alpha Lithium and Ioneer

Assuming the 90 days horizon Alpha Lithium is expected to generate 1.37 times less return on investment than Ioneer. In addition to that, Alpha Lithium is 1.0 times more volatile than ioneer. It trades about 0.2 of its total potential returns per unit of risk. ioneer is currently generating about 0.28 per unit of volatility. If you would invest  7.34  in ioneer on June 28, 2025 and sell it today you would earn a total of  4.66  from holding ioneer or generate 63.49% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Weak
Accuracy	95.45%
Values	Daily Returns

Alpha Lithium  vs.  ioneer

Alpha Lithium

Risk-Adjusted Performance

Fair

Compared to the overall equity markets, risk-adjusted returns on investments in Alpha Lithium are ranked lower than 10 (%) of all global equities and portfolios over the last 90 days. Despite nearly fragile forward indicators, Alpha Lithium reported solid returns over the last few months and may actually be approaching a breakup point.

ioneer

Risk-Adjusted Performance

Good

Compared to the overall equity markets, risk-adjusted returns on investments in ioneer are ranked lower than 13 (%) of all global equities and portfolios over the last 90 days. Despite nearly weak fundamental indicators, Ioneer reported solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Alpha Lithium and Ioneer

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

The idea behind Alpha Lithium and ioneer 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.

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 Portfolio Volatility module to check portfolio volatility and analyze historical return density to properly model market risk.