Correlation Between STRA Hannoversche and Standard Lithium
Can any of the company-specific risk be diversified away by investing in both STRA Hannoversche and Standard 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 STRA Hannoversche and Standard Lithium into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between STRA Hannoversche Verkehrsbetriebe and Standard Lithium, you can compare the effects of market volatilities on STRA Hannoversche and Standard 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 STRA Hannoversche with a short position of Standard Lithium. Check out your portfolio center. Please also check ongoing floating volatility patterns of STRA Hannoversche and Standard Lithium.
Diversification Opportunities for STRA Hannoversche and Standard Lithium
-0.33 | Correlation Coefficient |
Very good diversification
The 3 months correlation between STRA and Standard is -0.33. Overlapping area represents the amount of risk that can be diversified away by holding STRA Hannoversche Verkehrsbetr and Standard Lithium in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Standard Lithium and STRA Hannoversche 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 STRA Hannoversche Verkehrsbetriebe are associated (or correlated) with Standard Lithium. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Standard Lithium has no effect on the direction of STRA Hannoversche i.e., STRA Hannoversche and Standard Lithium go up and down completely randomly.
Pair Corralation between STRA Hannoversche and Standard Lithium
Assuming the 90 days horizon STRA Hannoversche Verkehrsbetriebe is expected to generate 0.97 times more return on investment than Standard Lithium. However, STRA Hannoversche Verkehrsbetriebe is 1.03 times less risky than Standard Lithium. It trades about 0.02 of its potential returns per unit of risk. Standard Lithium is currently generating about 0.0 per unit of risk. If you would invest 1,012 in STRA Hannoversche Verkehrsbetriebe on September 12, 2024 and sell it today you would lose (72.00) from holding STRA Hannoversche Verkehrsbetriebe or give up 7.11% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
STRA Hannoversche Verkehrsbetr vs. Standard Lithium
Performance |
| Timeline |
| STRA Hannoversche |
| Standard Lithium |
STRA Hannoversche and Standard Lithium Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with STRA Hannoversche and Standard Lithium
The main advantage of trading using opposite STRA Hannoversche and Standard Lithium positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if STRA Hannoversche position performs unexpectedly, Standard 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 Standard Lithium will offset losses from the drop in Standard Lithium's long position.| STRA Hannoversche vs. MUTUIONLINE | STRA Hannoversche vs. ON SEMICONDUCTOR | STRA Hannoversche vs. NXP Semiconductors NV | STRA Hannoversche vs. TOREX SEMICONDUCTOR LTD |
| Standard Lithium vs. BHP Group Limited | Standard Lithium vs. Vale SA | Standard Lithium vs. Superior Plus Corp | Standard Lithium 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 Crypto Correlations module to use cryptocurrency correlation module to diversify your cryptocurrency portfolio across multiple coins.
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