Correlation Between First Graphene and Ganfeng Lithium
Can any of the company-specific risk be diversified away by investing in both First Graphene 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 First Graphene and Ganfeng Lithium into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between First Graphene and Ganfeng Lithium Co, you can compare the effects of market volatilities on First Graphene 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 First Graphene with a short position of Ganfeng Lithium. Check out your portfolio center. Please also check ongoing floating volatility patterns of First Graphene and Ganfeng Lithium.
Diversification Opportunities for First Graphene and Ganfeng Lithium
-0.13 | Correlation Coefficient |
Good diversification
The 3 months correlation between First and Ganfeng is -0.13. Overlapping area represents the amount of risk that can be diversified away by holding First Graphene and Ganfeng Lithium Co in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Ganfeng Lithium and First Graphene 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 First Graphene 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 First Graphene i.e., First Graphene and Ganfeng Lithium go up and down completely randomly.
Pair Corralation between First Graphene and Ganfeng Lithium
Assuming the 90 days horizon First Graphene is expected to generate 2.98 times more return on investment than Ganfeng Lithium. However, First Graphene is 2.98 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 4.70 in First Graphene on October 23, 2024 and sell it today you would lose (0.90) from holding First Graphene or give up 19.15% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 99.49% |
| Values | Daily Returns |
First Graphene vs. Ganfeng Lithium Co
Performance |
| Timeline |
| First Graphene |
| Ganfeng Lithium |
First Graphene and Ganfeng Lithium Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with First Graphene and Ganfeng Lithium
The main advantage of trading using opposite First Graphene and Ganfeng Lithium positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if First Graphene 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.| First Graphene vs. Haydale Graphene Industries | First Graphene vs. Versarien plc | First Graphene vs. NanoXplore | First Graphene vs. G6 Materials Corp |
| 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 Analyzer module to analyze all characteristics, volatility and risk-adjusted return of Macroaxis ideas.
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