Correlation Between HEMISPHERE EGY and Ganfeng Lithium

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

By analyzing existing cross correlation between HEMISPHERE EGY and Ganfeng Lithium Co, you can compare the effects of market volatilities on HEMISPHERE EGY and Ganfeng Lithium 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 HEMISPHERE EGY with a short position of Ganfeng Lithium. Check out your portfolio center. Please also check ongoing floating volatility patterns of HEMISPHERE EGY and Ganfeng Lithium.

Diversification Opportunities for HEMISPHERE EGY and Ganfeng Lithium

0.16

Correlation Coefficient

HEMISPHERE EGY  Ganfeng Lithium

Average diversification

The 3 months correlation between HEMISPHERE and Ganfeng is 0.16. Overlapping area represents the amount of risk that can be diversified away by holding HEMISPHERE EGY and Ganfeng Lithium Co in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Ganfeng Lithium and HEMISPHERE EGY 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 HEMISPHERE EGY are associated (or correlated) with Ganfeng Lithium. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Ganfeng Lithium has no effect on the direction of HEMISPHERE EGY i.e., HEMISPHERE EGY and Ganfeng Lithium go up and down completely randomly.

Pair Corralation between HEMISPHERE EGY and Ganfeng Lithium

Assuming the 90 days trading horizon HEMISPHERE EGY is expected to generate 1.04 times less return on investment than Ganfeng Lithium. But when comparing it to its historical volatility, HEMISPHERE EGY is 3.7 times less risky than Ganfeng Lithium. It trades about 0.14 of its potential returns per unit of risk. Ganfeng Lithium Co is currently generating about 0.04 of returns per unit of risk over similar time horizon. If you would invest  198.00  in Ganfeng Lithium Co on October 7, 2024 and sell it today you would earn a total of  42.00  from holding Ganfeng Lithium Co or generate 21.21% return on investment over 90 days.

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

HEMISPHERE EGY  vs.  Ganfeng Lithium Co

HEMISPHERE EGY

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days HEMISPHERE EGY has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of comparatively stable basic indicators, HEMISPHERE EGY is not utilizing all of its potentials. The newest stock price uproar, may contribute to short-horizon losses for the private investors.

Ganfeng Lithium

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Ganfeng Lithium Co has generated negative risk-adjusted returns adding no value to investors with long positions. Despite uncertain performance in the last few months, the Stock's technical and fundamental indicators remain nearly stable which may send shares a bit higher in February 2025. The current disturbance may also be a sign of long-run up-swing for the company stockholders.

Pair Trading with HEMISPHERE EGY and Ganfeng Lithium

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

The idea behind HEMISPHERE EGY and Ganfeng Lithium Co 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 Funds Screener module to find actively-traded funds from around the world traded on over 30 global exchanges.