Correlation Between REDFLEX HOLDINGS and Lithium Power
Can any of the company-specific risk be diversified away by investing in both REDFLEX HOLDINGS and Lithium Power 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 REDFLEX HOLDINGS and Lithium Power into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between REDFLEX HOLDINGS LTD and Lithium Power International, you can compare the effects of market volatilities on REDFLEX HOLDINGS and Lithium Power 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 REDFLEX HOLDINGS with a short position of Lithium Power. Check out your portfolio center. Please also check ongoing floating volatility patterns of REDFLEX HOLDINGS and Lithium Power.
Diversification Opportunities for REDFLEX HOLDINGS and Lithium Power
0.0 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between REDFLEX and Lithium is 0.0. Overlapping area represents the amount of risk that can be diversified away by holding REDFLEX HOLDINGS LTD and Lithium Power International in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Lithium Power Intern and REDFLEX HOLDINGS 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 REDFLEX HOLDINGS LTD are associated (or correlated) with Lithium Power. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Lithium Power Intern has no effect on the direction of REDFLEX HOLDINGS i.e., REDFLEX HOLDINGS and Lithium Power go up and down completely randomly.
Pair Corralation between REDFLEX HOLDINGS and Lithium Power
If you would invest 3.70 in REDFLEX HOLDINGS LTD on December 6, 2024 and sell it today you would earn a total of 1.00 from holding REDFLEX HOLDINGS LTD or generate 27.03% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Flat |
| Strength | Insignificant |
| Accuracy | 0.0% |
| Values | Daily Returns |
REDFLEX HOLDINGS LTD vs. Lithium Power International
Performance |
| Timeline |
| REDFLEX HOLDINGS LTD |
| Lithium Power Intern |
Risk-Adjusted Performance
Very Weak
Weak | Strong |
REDFLEX HOLDINGS and Lithium Power Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with REDFLEX HOLDINGS and Lithium Power
The main advantage of trading using opposite REDFLEX HOLDINGS and Lithium Power positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if REDFLEX HOLDINGS position performs unexpectedly, Lithium Power 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 Lithium Power will offset losses from the drop in Lithium Power's long position.| REDFLEX HOLDINGS vs. GMxico Transportes SAB | ||
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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 Insider Screener module to find insiders across different sectors to evaluate their impact on performance.
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