Correlation Between HEMISPHERE EGY and Ganfeng Lithium
Can any of the company-specific risk be diversified away by investing in both HEMISPHERE EGY 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 HEMISPHERE EGY and Ganfeng Lithium into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between HEMISPHERE EGY and Ganfeng Lithium Co, you can compare the effects of market volatilities on HEMISPHERE EGY 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 HEMISPHERE EGY with a short position of Ganfeng Lithium. Check out your portfolio center. Please also check ongoing floating volatility patterns of HEMISPHERE EGY and Ganfeng Lithium.
Diversification Opportunities for HEMISPHERE EGY and Ganfeng Lithium
0.78 | Correlation Coefficient |
Poor diversification
The 3 months correlation between HEMISPHERE and Ganfeng is 0.78. Overlapping area represents the amount of risk that can be diversified away by holding HEMISPHERE EGY and Ganfeng Lithium Co in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Ganfeng Lithium and HEMISPHERE EGY 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 HEMISPHERE EGY 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 HEMISPHERE EGY i.e., HEMISPHERE EGY and Ganfeng Lithium go up and down completely randomly.
Pair Corralation between HEMISPHERE EGY and Ganfeng Lithium
Assuming the 90 days trading horizon HEMISPHERE EGY is expected to generate 0.32 times more return on investment than Ganfeng Lithium. However, HEMISPHERE EGY is 3.16 times less risky than Ganfeng Lithium. It trades about 0.09 of its potential returns per unit of risk. Ganfeng Lithium Co is currently generating about 0.01 per unit of risk. If you would invest 67.00 in HEMISPHERE EGY on September 12, 2024 and sell it today you would earn a total of 57.00 from holding HEMISPHERE EGY or generate 85.07% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
HEMISPHERE EGY vs. Ganfeng Lithium Co
Performance |
| Timeline |
| HEMISPHERE EGY |
| Ganfeng Lithium |
HEMISPHERE EGY and Ganfeng Lithium Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with HEMISPHERE EGY and Ganfeng Lithium
The main advantage of trading using opposite HEMISPHERE EGY and Ganfeng Lithium positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if HEMISPHERE EGY 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.| HEMISPHERE EGY vs. Apple Inc | HEMISPHERE EGY vs. Apple Inc | HEMISPHERE EGY vs. Apple Inc | HEMISPHERE EGY vs. Apple Inc |
| Ganfeng Lithium vs. HEMISPHERE EGY | Ganfeng Lithium vs. United Airlines Holdings | Ganfeng Lithium vs. Cogent Communications Holdings | Ganfeng Lithium vs. SOUTHWEST AIRLINES |
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 Stocks Directory module to find actively traded stocks across global markets.
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