Correlation Between Namibia Critical and Stria Lithium

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

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

Diversification Opportunities for Namibia Critical and Stria Lithium

0.5

Correlation Coefficient

Namibia Critical  Stria Lithium

Very weak diversification

The 3 months correlation between Namibia and Stria is 0.5. Overlapping area represents the amount of risk that can be diversified away by holding Namibia Critical Metals and Stria Lithium in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Stria Lithium and Namibia Critical 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 Namibia Critical Metals are associated (or correlated) with Stria Lithium. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Stria Lithium has no effect on the direction of Namibia Critical i.e., Namibia Critical and Stria Lithium go up and down completely randomly.

Pair Corralation between Namibia Critical and Stria Lithium

Assuming the 90 days horizon Namibia Critical is expected to generate 1.73 times less return on investment than Stria Lithium. In addition to that, Namibia Critical is 1.05 times more volatile than Stria Lithium. It trades about 0.11 of its total potential returns per unit of risk. Stria Lithium is currently generating about 0.2 per unit of volatility. If you would invest  8.08  in Stria Lithium on July 24, 2025 and sell it today you would earn a total of  17.92  from holding Stria Lithium or generate 221.78% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Weak
Accuracy	96.92%
Values	Daily Returns

Namibia Critical Metals  vs.  Stria Lithium

Namibia Critical Metals

Risk-Adjusted Performance

Fair

Compared to the overall equity markets, risk-adjusted returns on investments in Namibia Critical Metals are ranked lower than 8 (%) of all global equities and portfolios over the last 90 days. Despite nearly fragile technical and fundamental indicators, Namibia Critical reported solid returns over the last few months and may actually be approaching a breakup point.

Stria Lithium

Risk-Adjusted Performance

Good

Compared to the overall equity markets, risk-adjusted returns on investments in Stria Lithium are ranked lower than 15 (%) of all global equities and portfolios over the last 90 days. Despite nearly fragile basic indicators, Stria Lithium reported solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Namibia Critical and Stria Lithium

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

The idea behind Namibia Critical Metals and Stria Lithium 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.

Check out your portfolio center.

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 Optimization module to compute new portfolio that will generate highest expected return given your specified tolerance for risk.