Correlation Between Ganfeng Lithium and Shin Etsu
Can any of the company-specific risk be diversified away by investing in both Ganfeng Lithium and Shin Etsu 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 Shin Etsu 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 Shin Etsu Chemical Co, you can compare the effects of market volatilities on Ganfeng Lithium and Shin Etsu 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 Shin Etsu. Check out your portfolio center. Please also check ongoing floating volatility patterns of Ganfeng Lithium and Shin Etsu.
Diversification Opportunities for Ganfeng Lithium and Shin Etsu
-0.33 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Ganfeng and Shin is -0.33. Overlapping area represents the amount of risk that can be diversified away by holding Ganfeng Lithium Co and Shin Etsu Chemical Co in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Shin Etsu Chemical 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 Shin Etsu. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Shin Etsu Chemical has no effect on the direction of Ganfeng Lithium i.e., Ganfeng Lithium and Shin Etsu go up and down completely randomly.
Pair Corralation between Ganfeng Lithium and Shin Etsu
Assuming the 90 days trading horizon Ganfeng Lithium is expected to generate 2.38 times less return on investment than Shin Etsu. In addition to that, Ganfeng Lithium is 1.93 times more volatile than Shin Etsu Chemical Co. It trades about 0.01 of its total potential returns per unit of risk. Shin Etsu Chemical Co is currently generating about 0.04 per unit of volatility. If you would invest 2,372 in Shin Etsu Chemical Co on September 12, 2024 and sell it today you would earn a total of 1,060 from holding Shin Etsu Chemical Co or generate 44.69% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Ganfeng Lithium Co vs. Shin Etsu Chemical Co
Performance |
| Timeline |
| Ganfeng Lithium |
| Shin Etsu Chemical |
Ganfeng Lithium and Shin Etsu Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Ganfeng Lithium and Shin Etsu
The main advantage of trading using opposite Ganfeng Lithium and Shin Etsu positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Ganfeng Lithium position performs unexpectedly, Shin Etsu 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 Shin Etsu will offset losses from the drop in Shin Etsu's long position.| Ganfeng Lithium vs. HEMISPHERE EGY | Ganfeng Lithium vs. United Airlines Holdings | Ganfeng Lithium vs. Cogent Communications Holdings | Ganfeng Lithium vs. SOUTHWEST AIRLINES |
| Shin Etsu vs. AIR LIQUIDE ADR | Shin Etsu vs. Ganfeng Lithium Co | Shin Etsu vs. Superior Plus Corp | Shin Etsu 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 Stock Screener module to find equities using a custom stock filter or screen asymmetry in trading patterns, price, volume, or investment outlook..
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