Correlation Between Mader Group and Lithium Americas

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

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

Diversification Opportunities for Mader Group and Lithium Americas

-0.03

Correlation Coefficient

Mader Group  Lithium Americas

Good diversification

The 3 months correlation between Mader and Lithium is -0.03. Overlapping area represents the amount of risk that can be diversified away by holding Mader Group Limited 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 Mader Group 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 Mader Group Limited 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 Mader Group i.e., Mader Group and Lithium Americas go up and down completely randomly.

Pair Corralation between Mader Group and Lithium Americas

Assuming the 90 days horizon Mader Group Limited is expected to generate 0.8 times more return on investment than Lithium Americas. However, Mader Group Limited is 1.26 times less risky than Lithium Americas. It trades about 0.03 of its potential returns per unit of risk. Lithium Americas Corp is currently generating about 0.01 per unit of risk. If you would invest  433.00  in Mader Group Limited on May 14, 2025 and sell it today you would earn a total of  17.00  from holding Mader Group Limited or generate 3.93% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Insignificant
Accuracy	98.39%
Values	Daily Returns

Mader Group Limited  vs.  Lithium Americas Corp

Mader Group Limited

Risk-Adjusted Performance

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in Mader Group Limited are ranked lower than 2 (%) of all global equities and portfolios over the last 90 days. Despite nearly unsteady technical and fundamental indicators, Mader Group may actually be approaching a critical reversion point that can send shares even higher in September 2025.

Lithium Americas Corp

Risk-Adjusted Performance

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in Lithium Americas Corp are ranked lower than 1 (%) of all global equities and portfolios over the last 90 days. In spite of rather sound basic indicators, Lithium Americas is not utilizing all of its potentials. The latest stock price tumult, may contribute to shorter-term losses for the shareholders.

Pair Trading with Mader Group and Lithium Americas

The main advantage of trading using opposite Mader Group and Lithium Americas positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Mader Group 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 Mader Group Limited 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 FinTech Suite module to use AI to screen and filter profitable investment opportunities.