Correlation Between QUEEN S and Ganfeng Lithium

Can any of the company-specific risk be diversified away by investing in both QUEEN S 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 QUEEN S and Ganfeng Lithium into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between QUEEN S ROAD and Ganfeng Lithium Co, you can compare the effects of market volatilities on QUEEN S 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 QUEEN S with a short position of Ganfeng Lithium. Check out your portfolio center. Please also check ongoing floating volatility patterns of QUEEN S and Ganfeng Lithium.

Diversification Opportunities for QUEEN S and Ganfeng Lithium

0.23

Correlation Coefficient

QUEEN S  Ganfeng Lithium

Modest diversification

The 3 months correlation between QUEEN and Ganfeng is 0.23. Overlapping area represents the amount of risk that can be diversified away by holding QUEEN S ROAD and Ganfeng Lithium Co in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Ganfeng Lithium and QUEEN S 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 QUEEN S ROAD 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 QUEEN S i.e., QUEEN S and Ganfeng Lithium go up and down completely randomly.

Pair Corralation between QUEEN S and Ganfeng Lithium

Assuming the 90 days horizon QUEEN S is expected to generate 4.71 times less return on investment than Ganfeng Lithium. But when comparing it to its historical volatility, QUEEN S ROAD is 1.19 times less risky than Ganfeng Lithium. It trades about 0.04 of its potential returns per unit of risk. Ganfeng Lithium Co is currently generating about 0.15 of returns per unit of risk over similar time horizon. If you would invest  180.00  in Ganfeng Lithium Co on September 14, 2024 and sell it today you would earn a total of  92.00  from holding Ganfeng Lithium Co or generate 51.11% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Very Weak
Accuracy	100.0%
Values	Daily Returns

QUEEN S ROAD  vs.  Ganfeng Lithium Co

QUEEN S ROAD

Risk-Adjusted Performance

2 of 100

Modest

Compared to the overall equity markets, risk-adjusted returns on investments in QUEEN S ROAD are ranked lower than 2 (%) of all global equities and portfolios over the last 90 days. Despite nearly fragile basic indicators, QUEEN S may actually be approaching a critical reversion point that can send shares even higher in January 2025.

Ganfeng Lithium

Risk-Adjusted Performance

11 of 100

Good

Compared to the overall equity markets, risk-adjusted returns on investments in Ganfeng Lithium Co are ranked lower than 11 (%) of all global equities and portfolios over the last 90 days. Despite nearly fragile technical and fundamental indicators, Ganfeng Lithium reported solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with QUEEN S and Ganfeng Lithium

The main advantage of trading using opposite QUEEN S and Ganfeng Lithium positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if QUEEN S 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.

The idea behind QUEEN S ROAD and Ganfeng Lithium Co pairs trading is to make the combined position market-neutral, meaning the overall market's direction will not affect its win or loss (or potential downside or upside). This can be achieved by designing a pairs trade with two highly correlated stocks or equities that operate in a similar space or sector, making it possible to obtain profits through simple and relatively low-risk investment.

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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.