Correlation Between E I and Ganfeng Lithium

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

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

Diversification Opportunities for E I and Ganfeng Lithium

-0.27

Correlation Coefficient

E I  Ganfeng Lithium

Very good diversification

The 3 months correlation between CTA-PA and Ganfeng is -0.27. Overlapping area represents the amount of risk that can be diversified away by holding E I du and Ganfeng Lithium Co in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Ganfeng Lithium and E I 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 E I du are associated (or correlated) with Ganfeng Lithium. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Ganfeng Lithium has no effect on the direction of E I i.e., E I and Ganfeng Lithium go up and down completely randomly.

Pair Corralation between E I and Ganfeng Lithium

Assuming the 90 days trading horizon E I du is expected to generate 0.34 times more return on investment than Ganfeng Lithium. However, E I du is 2.98 times less risky than Ganfeng Lithium. It trades about -0.08 of its potential returns per unit of risk. Ganfeng Lithium Co is currently generating about -0.19 per unit of risk. If you would invest  5,750  in E I du on September 24, 2024 and sell it today you would lose (140.00) from holding E I du or give up 2.43% of portfolio value over 90 days.

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

E I du  vs.  Ganfeng Lithium Co

E I du

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days E I du has generated negative risk-adjusted returns adding no value to investors with long positions. Despite latest unsteady performance, the Preferred Stock's basic indicators remain strong and the current disturbance on Wall Street may also be a sign of long term gains for the company investors.

Ganfeng Lithium

Risk-Adjusted Performance

4 of 100

Insignificant

Compared to the overall equity markets, risk-adjusted returns on investments in Ganfeng Lithium Co are ranked lower than 4 (%) of all global equities and portfolios over the last 90 days. Despite nearly fragile basic indicators, Ganfeng Lithium reported solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with E I and Ganfeng Lithium

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

The idea behind E I du and Ganfeng Lithium Co 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 Piotroski F Score module to get Piotroski F Score based on the binary analysis strategy of nine different fundamentals.