Correlation Between Lizhan Environmental and AlphaTime Acquisition

Can any of the company-specific risk be diversified away by investing in both Lizhan Environmental and AlphaTime Acquisition 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 Lizhan Environmental and AlphaTime Acquisition into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between Lizhan Environmental and AlphaTime Acquisition Corp, you can compare the effects of market volatilities on Lizhan Environmental and AlphaTime Acquisition 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 Lizhan Environmental with a short position of AlphaTime Acquisition. Check out your portfolio center. Please also check ongoing floating volatility patterns of Lizhan Environmental and AlphaTime Acquisition.

Diversification Opportunities for Lizhan Environmental and AlphaTime Acquisition

0.0

Correlation Coefficient

Lizhan Environmental  AlphaTime Acquisition

Pay attention - limited upside

The 3 months correlation between Lizhan and AlphaTime is 0.0. Overlapping area represents the amount of risk that can be diversified away by holding Lizhan Environmental and AlphaTime Acquisition Corp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on AlphaTime Acquisition and Lizhan Environmental 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 Lizhan Environmental are associated (or correlated) with AlphaTime Acquisition. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of AlphaTime Acquisition has no effect on the direction of Lizhan Environmental i.e., Lizhan Environmental and AlphaTime Acquisition go up and down completely randomly.

Pair Corralation between Lizhan Environmental and AlphaTime Acquisition

If you would invest  0.01  in Lizhan Environmental on October 25, 2024 and sell it today you would earn a total of  0.00  from holding Lizhan Environmental or generate 0.0% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Flat
Strength	Insignificant
Accuracy	94.74%
Values	Daily Returns

Lizhan Environmental  vs.  AlphaTime Acquisition Corp

Lizhan Environmental

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Lizhan Environmental has generated negative risk-adjusted returns adding no value to investors with long positions. Despite nearly stable basic indicators, Lizhan Environmental is not utilizing all of its potentials. The latest stock price disturbance, may contribute to mid-run losses for the stockholders.

AlphaTime Acquisition

Risk-Adjusted Performance

8 of 100

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in AlphaTime Acquisition Corp are ranked lower than 8 (%) of all global equities and portfolios over the last 90 days. In spite of rather sound primary indicators, AlphaTime Acquisition is not utilizing all of its potentials. The newest stock price tumult, may contribute to shorter-term losses for the shareholders.

Pair Trading with Lizhan Environmental and AlphaTime Acquisition

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

The idea behind Lizhan Environmental and AlphaTime Acquisition Corp 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 Equity Analysis module to research over 250,000 global equities including funds, stocks and ETFs to find investment opportunities.