Correlation Between Lithium Americas and Linde Plc

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

Diversification Opportunities for Lithium Americas and Linde Plc

-0.07

Correlation Coefficient

Lithium Americas  Linde Plc

Good diversification

The 3 months correlation between Lithium and Linde is -0.07. Overlapping area represents the amount of risk that can be diversified away by holding Lithium Americas Corp and Linde plc Ordinary in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Linde plc Ordinary 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 Linde Plc. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Linde plc Ordinary has no effect on the direction of Lithium Americas i.e., Lithium Americas and Linde Plc go up and down completely randomly.

Pair Corralation between Lithium Americas and Linde Plc

Considering the 90-day investment horizon Lithium Americas Corp is expected to generate 14.67 times more return on investment than Linde Plc. However, Lithium Americas is 14.67 times more volatile than Linde plc Ordinary. It trades about 0.12 of its potential returns per unit of risk. Linde plc Ordinary is currently generating about -0.21 per unit of risk. If you would invest  289.00  in Lithium Americas Corp on September 5, 2025 and sell it today you would earn a total of  236.00  from holding Lithium Americas Corp or generate 81.66% 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.  Linde plc Ordinary

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 weak basic indicators, Lithium Americas exhibited solid returns over the last few months and may actually be approaching a breakup point.

Linde plc Ordinary

Risk-Adjusted Performance

Weakest

Over the last 90 days Linde plc Ordinary has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of weak performance in the last few months, the Stock's forward indicators remain very healthy which may send shares a bit higher in January 2026. The recent disarray may also be a sign of long period up-swing for the firm investors.

Pair Trading with Lithium Americas and Linde Plc

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

The idea behind Lithium Americas Corp and Linde plc Ordinary 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 Share Portfolio module to track or share privately all of your investments from the convenience of any device.