Correlation Between Lizhan Environmental and ReposiTrak

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

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

Diversification Opportunities for Lizhan Environmental and ReposiTrak

0.0

Correlation Coefficient

Lizhan Environmental  ReposiTrak

Pay attention - limited upside

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

Pair Corralation between Lizhan Environmental and ReposiTrak

If you would invest  571.00  in ReposiTrak on October 11, 2024 and sell it today you would earn a total of  1,551  from holding ReposiTrak or generate 271.63% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Flat
Strength	Insignificant
Accuracy	99.8%
Values	Daily Returns

Lizhan Environmental  vs.  ReposiTrak

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

ReposiTrak

Risk-Adjusted Performance

5 of 100

Modest

Compared to the overall equity markets, risk-adjusted returns on investments in ReposiTrak are ranked lower than 5 (%) of all global equities and portfolios over the last 90 days. Despite quite unfluctuating basic indicators, ReposiTrak may actually be approaching a critical reversion point that can send shares even higher in February 2025.

Pair Trading with Lizhan Environmental and ReposiTrak

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

The idea behind Lizhan Environmental and ReposiTrak 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 Positions Ratings module to determine portfolio positions ratings based on digital equity recommendations. Macroaxis instant position ratings are based on combination of fundamental analysis and risk-adjusted market performance.