Correlation Between International Lithium and Graphex Group

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

By analyzing existing cross correlation between International Lithium Corp and Graphex Group Limited, you can compare the effects of market volatilities on International Lithium and Graphex Group 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 International Lithium with a short position of Graphex Group. Check out your portfolio center. Please also check ongoing floating volatility patterns of International Lithium and Graphex Group.

Diversification Opportunities for International Lithium and Graphex Group

0.18

Correlation Coefficient

International Lithium  Graphex Group

Average diversification

The 3 months correlation between International and Graphex is 0.18. Overlapping area represents the amount of risk that can be diversified away by holding International Lithium Corp and Graphex Group Limited in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Graphex Group Limited and International 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 International Lithium Corp are associated (or correlated) with Graphex Group. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Graphex Group Limited has no effect on the direction of International Lithium i.e., International Lithium and Graphex Group go up and down completely randomly.

Pair Corralation between International Lithium and Graphex Group

Assuming the 90 days horizon International Lithium Corp is expected to generate 0.95 times more return on investment than Graphex Group. However, International Lithium Corp is 1.06 times less risky than Graphex Group. It trades about 0.04 of its potential returns per unit of risk. Graphex Group Limited is currently generating about 0.03 per unit of risk. If you would invest  1.31  in International Lithium Corp on September 3, 2024 and sell it today you would lose (0.01) from holding International Lithium Corp or give up 0.76% of portfolio value over 90 days.

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

International Lithium Corp  vs.  Graphex Group Limited

International Lithium

Risk-Adjusted Performance

3 of 100

Insignificant

Compared to the overall equity markets, risk-adjusted returns on investments in International Lithium Corp are ranked lower than 3 (%) of all global equities and portfolios over the last 90 days. Despite nearly fragile primary indicators, International Lithium reported solid returns over the last few months and may actually be approaching a breakup point.

Graphex Group Limited

Risk-Adjusted Performance

2 of 100

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in Graphex Group Limited are ranked lower than 2 (%) of all global equities and portfolios over the last 90 days. In spite of fairly weak technical and fundamental indicators, Graphex Group showed solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with International Lithium and Graphex Group

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

The idea behind International Lithium Corp and Graphex Group Limited 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 Volatility Analysis module to get historical volatility and risk analysis based on latest market data.