Correlation Between Ganfeng Lithium and E I

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

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

Diversification Opportunities for Ganfeng Lithium and E I

0.49

Correlation Coefficient

Ganfeng Lithium  E I

Very weak diversification

The 3 months correlation between Ganfeng and CTA-PA is 0.49. Overlapping area represents the amount of risk that can be diversified away by holding Ganfeng Lithium Co and E I du in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on E I du and Ganfeng Lithium 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 Ganfeng Lithium Co are associated (or correlated) with E I. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of E I du has no effect on the direction of Ganfeng Lithium i.e., Ganfeng Lithium and E I go up and down completely randomly.

Pair Corralation between Ganfeng Lithium and E I

Assuming the 90 days horizon Ganfeng Lithium Co is expected to generate 3.4 times more return on investment than E I. However, Ganfeng Lithium is 3.4 times more volatile than E I du. It trades about 0.05 of its potential returns per unit of risk. E I du is currently generating about 0.1 per unit of risk. If you would invest  263.00  in Ganfeng Lithium Co on December 30, 2024 and sell it today you would earn a total of  17.00  from holding Ganfeng Lithium Co or generate 6.46% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Weak
Accuracy	98.39%
Values	Daily Returns

Ganfeng Lithium Co  vs.  E I du

Ganfeng Lithium

Risk-Adjusted Performance

Insignificant

Compared to the overall equity markets, risk-adjusted returns on investments in Ganfeng Lithium Co are ranked lower than 3 (%) of all global equities and portfolios over the last 90 days. Despite nearly fragile basic indicators, Ganfeng Lithium may actually be approaching a critical reversion point that can send shares even higher in April 2025.

E I du

Risk-Adjusted Performance

OK

Compared to the overall equity markets, risk-adjusted returns on investments in E I du are ranked lower than 7 (%) of all global equities and portfolios over the last 90 days. Despite somewhat strong basic indicators, E I is not utilizing all of its potentials. The latest stock price disturbance, may contribute to short-term losses for the investors.

Pair Trading with Ganfeng Lithium and E I

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

The idea behind Ganfeng Lithium Co and E I du 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.

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 Portfolio Dashboard module to portfolio dashboard that provides centralized access to all your investments.