Correlation Between Topbuild Corp and Lithium Americas

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

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

Diversification Opportunities for Topbuild Corp and Lithium Americas

0.09

Correlation Coefficient

Topbuild Corp  Lithium Americas

Significant diversification

The 3 months correlation between Topbuild and Lithium is 0.09. Overlapping area represents the amount of risk that can be diversified away by holding Topbuild Corp and Lithium Americas Corp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Lithium Americas Corp and Topbuild Corp 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 Topbuild Corp are associated (or correlated) with Lithium Americas. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Lithium Americas Corp has no effect on the direction of Topbuild Corp i.e., Topbuild Corp and Lithium Americas go up and down completely randomly.

Pair Corralation between Topbuild Corp and Lithium Americas

Considering the 90-day investment horizon Topbuild Corp is expected to generate 15.32 times less return on investment than Lithium Americas. But when comparing it to its historical volatility, Topbuild Corp is 6.29 times less risky than Lithium Americas. It trades about 0.05 of its potential returns per unit of risk. Lithium Americas Corp is currently generating about 0.12 of returns per unit of risk over similar time horizon. If you would invest  286.00  in Lithium Americas Corp on September 12, 2025 and sell it today you would earn a total of  228.00  from holding Lithium Americas Corp or generate 79.72% return on investment over 90 days.

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

Topbuild Corp  vs.  Lithium Americas Corp

Topbuild Corp

Risk-Adjusted Performance

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in Topbuild Corp are ranked lower than 3 (%) of all global equities and portfolios over the last 90 days. In spite of rather conflicting essential indicators, Topbuild Corp may actually be approaching a critical reversion point that can send shares even higher in January 2026.

Lithium Americas Corp

Risk-Adjusted Performance

Fair

Compared to the overall equity markets, risk-adjusted returns on investments in Lithium Americas Corp are ranked lower than 9 (%) of all global equities and portfolios over the last 90 days. In spite of rather conflicting basic indicators, Lithium Americas exhibited solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Topbuild Corp and Lithium Americas

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

The idea behind Topbuild Corp and Lithium Americas Corp 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 Portfolio Comparator module to compare the composition, asset allocations and performance of any two portfolios in your account.