Correlation Between Lithium Americas and Krispy Kreme

Can any of the company-specific risk be diversified away by investing in both Lithium Americas and Krispy Kreme 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 Krispy Kreme 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 Krispy Kreme, you can compare the effects of market volatilities on Lithium Americas and Krispy Kreme 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 Krispy Kreme. Check out your portfolio center. Please also check ongoing floating volatility patterns of Lithium Americas and Krispy Kreme.

Diversification Opportunities for Lithium Americas and Krispy Kreme

-0.01

Correlation Coefficient

Lithium Americas  Krispy Kreme

Good diversification

The 3 months correlation between Lithium and Krispy is -0.01. Overlapping area represents the amount of risk that can be diversified away by holding Lithium Americas Corp and Krispy Kreme in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Krispy Kreme 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 Krispy Kreme. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Krispy Kreme has no effect on the direction of Lithium Americas i.e., Lithium Americas and Krispy Kreme go up and down completely randomly.

Pair Corralation between Lithium Americas and Krispy Kreme

Considering the 90-day investment horizon Lithium Americas Corp is expected to generate 2.69 times more return on investment than Krispy Kreme. However, Lithium Americas is 2.69 times more volatile than Krispy Kreme. It trades about 0.14 of its potential returns per unit of risk. Krispy Kreme is currently generating about 0.02 per unit of risk. If you would invest  312.00  in Lithium Americas Corp on July 20, 2025 and sell it today you would earn a total of  367.00  from holding Lithium Americas Corp or generate 117.63% return on investment over 90 days.

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

Lithium Americas Corp  vs.  Krispy Kreme

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 10 (%) of all global equities and portfolios over the last 90 days. In spite of rather uncertain basic indicators, Lithium Americas exhibited solid returns over the last few months and may actually be approaching a breakup point.

Krispy Kreme

Risk-Adjusted Performance

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in Krispy Kreme are ranked lower than 1 (%) of all global equities and portfolios over the last 90 days. In spite of comparatively inconsistent basic indicators, Krispy Kreme may actually be approaching a critical reversion point that can send shares even higher in November 2025.

Pair Trading with Lithium Americas and Krispy Kreme

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

The idea behind Lithium Americas Corp and Krispy Kreme 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 Idea Optimizer module to use advanced portfolio builder with pre-computed micro ideas to build optimal portfolio .