Correlation Between Albemarle Corp and Global X
Can any of the company-specific risk be diversified away by investing in both Albemarle Corp and Global X 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 Albemarle Corp and Global X into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Albemarle Corp and Global X Lithium, you can compare the effects of market volatilities on Albemarle Corp and Global X 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 Albemarle Corp with a short position of Global X. Check out your portfolio center. Please also check ongoing floating volatility patterns of Albemarle Corp and Global X.
Diversification Opportunities for Albemarle Corp and Global X
0.91 | Correlation Coefficient |
Almost no diversification
The 3 months correlation between Albemarle and Global is 0.91. Overlapping area represents the amount of risk that can be diversified away by holding Albemarle Corp and Global X Lithium in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Global X Lithium and Albemarle Corp 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 Albemarle Corp are associated (or correlated) with Global X. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Global X Lithium has no effect on the direction of Albemarle Corp i.e., Albemarle Corp and Global X go up and down completely randomly.
Pair Corralation between Albemarle Corp and Global X
Considering the 90-day investment horizon Albemarle Corp is expected to under-perform the Global X. In addition to that, Albemarle Corp is 1.8 times more volatile than Global X Lithium. It trades about -0.04 of its total potential returns per unit of risk. Global X Lithium is currently generating about -0.03 per unit of volatility. If you would invest 6,530 in Global X Lithium on August 24, 2024 and sell it today you would lose (2,033) from holding Global X Lithium or give up 31.13% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Albemarle Corp vs. Global X Lithium
Performance |
| Timeline |
| Albemarle Corp |
| Global X Lithium |
Albemarle Corp and Global X Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Albemarle Corp and Global X
The main advantage of trading using opposite Albemarle Corp and Global X positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Albemarle Corp position performs unexpectedly, Global X 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 Global X will offset losses from the drop in Global X's long position.| Albemarle Corp vs. Eshallgo Class A | Albemarle Corp vs. Amtech Systems | Albemarle Corp vs. Gold Fields Ltd | Albemarle Corp vs. Aegean Airlines SA |
| Global X vs. Invesco Solar ETF | Global X vs. Albemarle Corp | Global X vs. Lithium Americas Corp | Global X vs. iShares Global Clean |
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 Theme Ratings module to determine theme ratings based on digital equity recommendations. Macroaxis theme ratings are based on combination of fundamental analysis and risk-adjusted market performance.
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