Correlation Between Ameriwest Lithium and Sayona Mining

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

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

Diversification Opportunities for Ameriwest Lithium and Sayona Mining

0.76

Correlation Coefficient

Ameriwest Lithium  Sayona Mining

Poor diversification

The 3 months correlation between Ameriwest and Sayona is 0.76. Overlapping area represents the amount of risk that can be diversified away by holding Ameriwest Lithium and Sayona Mining Limited in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Sayona Mining Limited and Ameriwest 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 Ameriwest Lithium are associated (or correlated) with Sayona Mining. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Sayona Mining Limited has no effect on the direction of Ameriwest Lithium i.e., Ameriwest Lithium and Sayona Mining go up and down completely randomly.

Pair Corralation between Ameriwest Lithium and Sayona Mining

Assuming the 90 days horizon Ameriwest Lithium is expected to generate 0.85 times more return on investment than Sayona Mining. However, Ameriwest Lithium is 1.17 times less risky than Sayona Mining. It trades about 0.18 of its potential returns per unit of risk. Sayona Mining Limited is currently generating about 0.08 per unit of risk. If you would invest  14.00  in Ameriwest Lithium on May 6, 2025 and sell it today you would earn a total of  16.00  from holding Ameriwest Lithium or generate 114.29% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Significant
Accuracy	100.0%
Values	Daily Returns

Ameriwest Lithium  vs.  Sayona Mining Limited

Ameriwest Lithium

Risk-Adjusted Performance

Good

Compared to the overall equity markets, risk-adjusted returns on investments in Ameriwest Lithium are ranked lower than 14 (%) of all global equities and portfolios over the last 90 days. Despite nearly fragile forward indicators, Ameriwest Lithium reported solid returns over the last few months and may actually be approaching a breakup point.

Sayona Mining Limited

Risk-Adjusted Performance

Modest

Compared to the overall equity markets, risk-adjusted returns on investments in Sayona Mining Limited are ranked lower than 6 (%) of all global equities and portfolios over the last 90 days. Despite nearly fragile basic indicators, Sayona Mining reported solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Ameriwest Lithium and Sayona Mining

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

The idea behind Ameriwest Lithium and Sayona Mining Limited 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 Funds Screener module to find actively-traded funds from around the world traded on over 30 global exchanges.