Correlation Between Panoramic Resources and Global Li-Ion

Can any of the company-specific risk be diversified away by investing in both Panoramic Resources and Global Li-Ion 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 Panoramic Resources and Global Li-Ion into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between Panoramic Resources Limited and Global Li Ion Graphite, you can compare the effects of market volatilities on Panoramic Resources and Global Li-Ion 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 Panoramic Resources with a short position of Global Li-Ion. Check out your portfolio center. Please also check ongoing floating volatility patterns of Panoramic Resources and Global Li-Ion.

Diversification Opportunities for Panoramic Resources and Global Li-Ion

-0.05

Correlation Coefficient

Panoramic Resources  Global Li-Ion

Good diversification

The 3 months correlation between Panoramic and Global is -0.05. Overlapping area represents the amount of risk that can be diversified away by holding Panoramic Resources Limited and Global Li Ion Graphite in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Global Li Ion and Panoramic Resources 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 Panoramic Resources Limited are associated (or correlated) with Global Li-Ion. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Global Li Ion has no effect on the direction of Panoramic Resources i.e., Panoramic Resources and Global Li-Ion go up and down completely randomly.

Pair Corralation between Panoramic Resources and Global Li-Ion

If you would invest  1.38  in Global Li Ion Graphite on September 5, 2024 and sell it today you would lose (0.16) from holding Global Li Ion Graphite or give up 11.59% of portfolio value over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Insignificant
Accuracy	15.63%
Values	Daily Returns

Panoramic Resources Limited  vs.  Global Li Ion Graphite

Panoramic Resources

Risk-Adjusted Performance

0 of 100

Very Weak

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

Global Li Ion

Risk-Adjusted Performance

4 of 100

Insignificant

Compared to the overall equity markets, risk-adjusted returns on investments in Global Li Ion Graphite are ranked lower than 4 (%) of all global equities and portfolios over the last 90 days. Despite nearly fragile technical and fundamental indicators, Global Li-Ion reported solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Panoramic Resources and Global Li-Ion

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

The idea behind Panoramic Resources Limited and Global Li Ion Graphite 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 Content Syndication module to quickly integrate customizable finance content to your own investment portal.