Correlation Between Ganfeng Lithium and AdvanSix
Can any of the company-specific risk be diversified away by investing in both Ganfeng Lithium and AdvanSix 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 Ganfeng Lithium and AdvanSix into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Ganfeng Lithium Co and AdvanSix, you can compare the effects of market volatilities on Ganfeng Lithium and AdvanSix 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 Ganfeng Lithium with a short position of AdvanSix. Check out your portfolio center. Please also check ongoing floating volatility patterns of Ganfeng Lithium and AdvanSix.
Diversification Opportunities for Ganfeng Lithium and AdvanSix
0.81 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between Ganfeng and AdvanSix is 0.81. Overlapping area represents the amount of risk that can be diversified away by holding Ganfeng Lithium Co and AdvanSix in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on AdvanSix and Ganfeng Lithium 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 Ganfeng Lithium Co are associated (or correlated) with AdvanSix. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of AdvanSix has no effect on the direction of Ganfeng Lithium i.e., Ganfeng Lithium and AdvanSix go up and down completely randomly.
Pair Corralation between Ganfeng Lithium and AdvanSix
Assuming the 90 days trading horizon Ganfeng Lithium Co is expected to generate 2.09 times more return on investment than AdvanSix. However, Ganfeng Lithium is 2.09 times more volatile than AdvanSix. It trades about 0.05 of its potential returns per unit of risk. AdvanSix is currently generating about 0.04 per unit of risk. If you would invest 197.00 in Ganfeng Lithium Co on September 14, 2024 and sell it today you would earn a total of 75.00 from holding Ganfeng Lithium Co or generate 38.07% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 99.64% |
| Values | Daily Returns |
Ganfeng Lithium Co vs. AdvanSix
Performance |
| Timeline |
| Ganfeng Lithium |
| AdvanSix |
Ganfeng Lithium and AdvanSix Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Ganfeng Lithium and AdvanSix
The main advantage of trading using opposite Ganfeng Lithium and AdvanSix positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Ganfeng Lithium position performs unexpectedly, AdvanSix 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 AdvanSix will offset losses from the drop in AdvanSix's long position.| Ganfeng Lithium vs. AIR LIQUIDE ADR | Ganfeng Lithium vs. Superior Plus Corp | Ganfeng Lithium vs. SIVERS SEMICONDUCTORS AB | Ganfeng Lithium vs. Norsk Hydro ASA |
| AdvanSix vs. AIR LIQUIDE ADR | AdvanSix vs. Ganfeng Lithium Co | AdvanSix vs. Superior Plus Corp | AdvanSix vs. SIVERS SEMICONDUCTORS AB |
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 Idea Optimizer module to use advanced portfolio builder with pre-computed micro ideas to build optimal portfolio .
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