Correlation Between International Lithium and Graphex Group
Can any of the company-specific risk be diversified away by investing in both International Lithium and Graphex Group 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 International Lithium and Graphex Group into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between International Lithium Corp and Graphex Group Limited, you can compare the effects of market volatilities on International Lithium and Graphex Group 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 International Lithium with a short position of Graphex Group. Check out your portfolio center. Please also check ongoing floating volatility patterns of International Lithium and Graphex Group.
Diversification Opportunities for International Lithium and Graphex Group
0.18 | Correlation Coefficient |
Average diversification
The 3 months correlation between International and Graphex is 0.18. Overlapping area represents the amount of risk that can be diversified away by holding International Lithium Corp and Graphex Group Limited in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Graphex Group Limited and International 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 International Lithium Corp are associated (or correlated) with Graphex Group. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Graphex Group Limited has no effect on the direction of International Lithium i.e., International Lithium and Graphex Group go up and down completely randomly.
Pair Corralation between International Lithium and Graphex Group
Assuming the 90 days horizon International Lithium Corp is expected to generate 1.2 times more return on investment than Graphex Group. However, International Lithium is 1.2 times more volatile than Graphex Group Limited. It trades about 0.01 of its potential returns per unit of risk. Graphex Group Limited is currently generating about -0.02 per unit of risk. If you would invest 4.42 in International Lithium Corp on September 4, 2024 and sell it today you would lose (3.14) from holding International Lithium Corp or give up 71.04% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
International Lithium Corp vs. Graphex Group Limited
Performance |
| Timeline |
| International Lithium |
| Graphex Group Limited |
International Lithium and Graphex Group Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with International Lithium and Graphex Group
The main advantage of trading using opposite International Lithium and Graphex Group positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if International Lithium position performs unexpectedly, Graphex Group 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 Graphex Group will offset losses from the drop in Graphex Group's long position.| International Lithium vs. Qubec Nickel Corp | International Lithium vs. IGO Limited | International Lithium vs. Avarone Metals | International Lithium vs. Adriatic Metals PLC |
| Graphex Group vs. Qubec Nickel Corp | Graphex Group vs. American Rare Earths | Graphex Group vs. Cypress Development Corp | Graphex Group vs. Jervois Mining |
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 Portfolio Rebalancing module to analyze risk-adjusted returns against different time horizons to find asset-allocation targets.
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