Correlation Between Lizhan Environmental and Denarius Silver

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

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

Diversification Opportunities for Lizhan Environmental and Denarius Silver

0.0

Correlation Coefficient

Lizhan Environmental  Denarius Silver

Pay attention - limited upside

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

Pair Corralation between Lizhan Environmental and Denarius Silver

If you would invest  34.00  in Denarius Silver Corp on October 11, 2024 and sell it today you would earn a total of  11.00  from holding Denarius Silver Corp or generate 32.35% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Flat
Strength	Insignificant
Accuracy	99.6%
Values	Daily Returns

Lizhan Environmental  vs.  Denarius Silver 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.

Denarius Silver Corp

Risk-Adjusted Performance

0 of 100

Insignificant

Over the last 90 days Denarius Silver Corp has generated negative risk-adjusted returns adding no value to investors with long positions. Despite latest weak 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.

Pair Trading with Lizhan Environmental and Denarius Silver

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

The idea behind Lizhan Environmental and Denarius Silver 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 Search module to search for actively traded equities including funds and ETFs from over 30 global markets.