Correlation Between Tradegate and E3 LITHIUM
Can any of the company-specific risk be diversified away by investing in both Tradegate and E3 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 Tradegate and E3 LITHIUM into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Tradegate AG Wertpapierhandelsbank and E3 LITHIUM LTD, you can compare the effects of market volatilities on Tradegate and E3 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 Tradegate with a short position of E3 LITHIUM. Check out your portfolio center. Please also check ongoing floating volatility patterns of Tradegate and E3 LITHIUM.
Diversification Opportunities for Tradegate and E3 LITHIUM
-0.35 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Tradegate and OW3 is -0.35. Overlapping area represents the amount of risk that can be diversified away by holding Tradegate AG Wertpapierhandels and E3 LITHIUM LTD in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on E3 LITHIUM LTD and Tradegate 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 Tradegate AG Wertpapierhandelsbank are associated (or correlated) with E3 LITHIUM. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of E3 LITHIUM LTD has no effect on the direction of Tradegate i.e., Tradegate and E3 LITHIUM go up and down completely randomly.
Pair Corralation between Tradegate and E3 LITHIUM
Assuming the 90 days horizon Tradegate AG Wertpapierhandelsbank is expected to generate 0.24 times more return on investment than E3 LITHIUM. However, Tradegate AG Wertpapierhandelsbank is 4.21 times less risky than E3 LITHIUM. It trades about -0.03 of its potential returns per unit of risk. E3 LITHIUM LTD is currently generating about -0.01 per unit of risk. If you would invest 10,788 in Tradegate AG Wertpapierhandelsbank on October 26, 2024 and sell it today you would lose (1,938) from holding Tradegate AG Wertpapierhandelsbank or give up 17.96% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 99.8% |
| Values | Daily Returns |
Tradegate AG Wertpapierhandels vs. E3 LITHIUM LTD
Performance |
| Timeline |
| Tradegate AG Wertpap |
| E3 LITHIUM LTD |
Tradegate and E3 LITHIUM Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Tradegate and E3 LITHIUM
The main advantage of trading using opposite Tradegate and E3 LITHIUM positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Tradegate position performs unexpectedly, E3 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 E3 LITHIUM will offset losses from the drop in E3 LITHIUM's long position.| Tradegate vs. Goodyear Tire Rubber | Tradegate vs. Nishi Nippon Railroad Co | Tradegate vs. Mitsubishi Materials | Tradegate vs. NAGOYA RAILROAD |
| E3 LITHIUM vs. DISTRICT METALS | E3 LITHIUM vs. PARKEN Sport Entertainment | E3 LITHIUM vs. ARDAGH METAL PACDL 0001 | E3 LITHIUM vs. Kingdee International Software |
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 Sign In To Macroaxis module to sign in to explore Macroaxis' wealth optimization platform and fintech modules.
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