Correlation Between Lizhan Environmental and Cannae Holdings

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

By analyzing existing cross correlation between Lizhan Environmental and Cannae Holdings, you can compare the effects of market volatilities on Lizhan Environmental and Cannae Holdings 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 Cannae Holdings. Check out your portfolio center. Please also check ongoing floating volatility patterns of Lizhan Environmental and Cannae Holdings.

Diversification Opportunities for Lizhan Environmental and Cannae Holdings

0.0

Correlation Coefficient

Lizhan Environmental  Cannae Holdings

Pay attention - limited upside

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

Pair Corralation between Lizhan Environmental and Cannae Holdings

If you would invest  0.01  in Lizhan Environmental on December 20, 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	100.0%
Values	Daily Returns

Lizhan Environmental  vs.  Cannae Holdings

Lizhan Environmental

Risk-Adjusted Performance

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 current stock price disturbance, may contribute to mid-run losses for the stockholders.

Cannae Holdings

Risk-Adjusted Performance

Very Weak

Over the last 90 days Cannae Holdings has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of inconsistent performance in the last few months, the Stock's basic indicators remain rather sound which may send shares a bit higher in April 2025. The latest tumult may also be a sign of longer-term up-swing for the firm shareholders.

Pair Trading with Lizhan Environmental and Cannae Holdings

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

The idea behind Lizhan Environmental and Cannae Holdings 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 Bonds Directory module to find actively traded corporate debentures issued by US companies.