Correlation Between Strategic Investments and TIANQI LITHIUM

Can any of the company-specific risk be diversified away by investing in both Strategic Investments and TIANQI 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 Strategic Investments and TIANQI LITHIUM into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between Strategic Investments AS and TIANQI LITHIUM H, you can compare the effects of market volatilities on Strategic Investments and TIANQI 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 Strategic Investments with a short position of TIANQI LITHIUM. Check out your portfolio center. Please also check ongoing floating volatility patterns of Strategic Investments and TIANQI LITHIUM.

Diversification Opportunities for Strategic Investments and TIANQI LITHIUM

-0.17

Correlation Coefficient

Strategic Investments  TIANQI LITHIUM

Good diversification

The 3 months correlation between Strategic and TIANQI is -0.17. Overlapping area represents the amount of risk that can be diversified away by holding Strategic Investments AS and TIANQI LITHIUM H in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on TIANQI LITHIUM H and Strategic Investments 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 Strategic Investments AS are associated (or correlated) with TIANQI LITHIUM. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of TIANQI LITHIUM H has no effect on the direction of Strategic Investments i.e., Strategic Investments and TIANQI LITHIUM go up and down completely randomly.

Pair Corralation between Strategic Investments and TIANQI LITHIUM

Assuming the 90 days horizon Strategic Investments AS is expected to under-perform the TIANQI LITHIUM. But the stock apears to be less risky and, when comparing its historical volatility, Strategic Investments AS is 1.4 times less risky than TIANQI LITHIUM. The stock trades about -0.03 of its potential returns per unit of risk. The TIANQI LITHIUM H is currently generating about 0.11 of returns per unit of risk over similar time horizon. If you would invest  216.00  in TIANQI LITHIUM H on September 16, 2024 and sell it today you would earn a total of  84.00  from holding TIANQI LITHIUM H or generate 38.89% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Insignificant
Accuracy	100.0%
Values	Daily Returns

Strategic Investments AS  vs.  TIANQI LITHIUM H

Strategic Investments

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Strategic Investments AS has generated negative risk-adjusted returns adding no value to investors with long positions. Despite latest fragile performance, the Stock's basic indicators remain stable and the current disturbance on Wall Street may also be a sign of long-run gains for the company stockholders.

TIANQI LITHIUM H

Risk-Adjusted Performance

8 of 100

OK

Compared to the overall equity markets, risk-adjusted returns on investments in TIANQI LITHIUM H are ranked lower than 8 (%) of all global equities and portfolios over the last 90 days. Despite nearly fragile basic indicators, TIANQI LITHIUM reported solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Strategic Investments and TIANQI LITHIUM

The main advantage of trading using opposite Strategic Investments and TIANQI LITHIUM positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Strategic Investments position performs unexpectedly, TIANQI 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 TIANQI LITHIUM will offset losses from the drop in TIANQI LITHIUM's long position.

The idea behind Strategic Investments AS and TIANQI LITHIUM H 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 Correlation Analysis module to reduce portfolio risk simply by holding instruments which are not perfectly correlated.