Correlation Between Altech Batteries and Ganfeng Lithium
Can any of the company-specific risk be diversified away by investing in both Altech Batteries 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 Altech Batteries and Ganfeng Lithium into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Altech Batteries Limited and Ganfeng Lithium Co, you can compare the effects of market volatilities on Altech Batteries 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 Altech Batteries with a short position of Ganfeng Lithium. Check out your portfolio center. Please also check ongoing floating volatility patterns of Altech Batteries and Ganfeng Lithium.
Diversification Opportunities for Altech Batteries and Ganfeng Lithium
0.26 | Correlation Coefficient |
Modest diversification
The 3 months correlation between Altech and Ganfeng is 0.26. Overlapping area represents the amount of risk that can be diversified away by holding Altech Batteries Limited and Ganfeng Lithium Co in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Ganfeng Lithium and Altech Batteries 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 Altech Batteries Limited 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 Altech Batteries i.e., Altech Batteries and Ganfeng Lithium go up and down completely randomly.
Pair Corralation between Altech Batteries and Ganfeng Lithium
Assuming the 90 days horizon Altech Batteries Limited is expected to generate 4.61 times more return on investment than Ganfeng Lithium. However, Altech Batteries is 4.61 times more volatile than Ganfeng Lithium Co. It trades about 0.06 of its potential returns per unit of risk. Ganfeng Lithium Co is currently generating about 0.03 per unit of risk. If you would invest 3.70 in Altech Batteries Limited on November 3, 2024 and sell it today you would lose (0.80) from holding Altech Batteries Limited or give up 21.62% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 99.6% |
| Values | Daily Returns |
Altech Batteries Limited vs. Ganfeng Lithium Co
Performance |
| Timeline |
| Altech Batteries |
| Ganfeng Lithium |
Altech Batteries and Ganfeng Lithium Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Altech Batteries and Ganfeng Lithium
The main advantage of trading using opposite Altech Batteries and Ganfeng Lithium positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Altech Batteries 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.| Altech Batteries vs. Mattel Inc | Altech Batteries vs. Sonos Inc | Altech Batteries vs. Marine Products | Altech Batteries vs. Playa Hotels Resorts |
| Ganfeng Lithium vs. BioLargo | Ganfeng Lithium vs. Shin Etsu Chemical Co | Ganfeng Lithium vs. Lsb Industries | Ganfeng Lithium vs. Braskem SA Class |
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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