Correlation Between Ganfeng Lithium and First Graphene
Can any of the company-specific risk be diversified away by investing in both Ganfeng Lithium and First Graphene 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 First Graphene 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 First Graphene, you can compare the effects of market volatilities on Ganfeng Lithium and First Graphene 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 First Graphene. Check out your portfolio center. Please also check ongoing floating volatility patterns of Ganfeng Lithium and First Graphene.
Diversification Opportunities for Ganfeng Lithium and First Graphene
-0.15 | Correlation Coefficient |
Good diversification
The 3 months correlation between Ganfeng and First is -0.15. Overlapping area represents the amount of risk that can be diversified away by holding Ganfeng Lithium Co and First Graphene in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on First Graphene 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 First Graphene. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of First Graphene has no effect on the direction of Ganfeng Lithium i.e., Ganfeng Lithium and First Graphene go up and down completely randomly.
Pair Corralation between Ganfeng Lithium and First Graphene
Assuming the 90 days horizon Ganfeng Lithium is expected to generate 5.57 times less return on investment than First Graphene. But when comparing it to its historical volatility, Ganfeng Lithium Co is 2.76 times less risky than First Graphene. It trades about 0.03 of its potential returns per unit of risk. First Graphene is currently generating about 0.05 of returns per unit of risk over similar time horizon. If you would invest 3.75 in First Graphene on January 14, 2025 and sell it today you would lose (0.65) from holding First Graphene or give up 17.33% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Ganfeng Lithium Co vs. First Graphene
Performance |
| Timeline |
| Ganfeng Lithium |
| First Graphene |
Ganfeng Lithium and First Graphene Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Ganfeng Lithium and First Graphene
The main advantage of trading using opposite Ganfeng Lithium and First Graphene positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Ganfeng Lithium position performs unexpectedly, First Graphene 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 First Graphene will offset losses from the drop in First Graphene's long position.| Ganfeng Lithium vs. Shin Etsu Chemical Co | Ganfeng Lithium vs. BASF SE ADR | Ganfeng Lithium vs. Braskem SA Class | Ganfeng Lithium vs. Celanese |
| First Graphene vs. Shin Etsu Chemical Co | First Graphene vs. BASF SE ADR | First Graphene vs. Braskem SA Class | First Graphene vs. Celanese |
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 Money Flow Index module to determine momentum by analyzing Money Flow Index and other technical indicators.
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