Correlation Between Everjoy Health and Jiangxi Ganfeng

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

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

Diversification Opportunities for Everjoy Health and Jiangxi Ganfeng

0.39

Correlation Coefficient

Everjoy Health  Jiangxi Ganfeng

Weak diversification

The 3 months correlation between Everjoy and Jiangxi is 0.39. Overlapping area represents the amount of risk that can be diversified away by holding Everjoy Health Group and Jiangxi Ganfeng Lithium in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Jiangxi Ganfeng Lithium and Everjoy Health 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 Everjoy Health Group are associated (or correlated) with Jiangxi Ganfeng. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Jiangxi Ganfeng Lithium has no effect on the direction of Everjoy Health i.e., Everjoy Health and Jiangxi Ganfeng go up and down completely randomly.

Pair Corralation between Everjoy Health and Jiangxi Ganfeng

Assuming the 90 days trading horizon Everjoy Health is expected to generate 1.25 times less return on investment than Jiangxi Ganfeng. In addition to that, Everjoy Health is 1.1 times more volatile than Jiangxi Ganfeng Lithium. It trades about 0.04 of its total potential returns per unit of risk. Jiangxi Ganfeng Lithium is currently generating about 0.06 per unit of volatility. If you would invest  3,247  in Jiangxi Ganfeng Lithium on October 22, 2024 and sell it today you would earn a total of  307.00  from holding Jiangxi Ganfeng Lithium or generate 9.45% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Very Weak
Accuracy	98.46%
Values	Daily Returns

Everjoy Health Group  vs.  Jiangxi Ganfeng Lithium

Everjoy Health Group

Risk-Adjusted Performance

3 of 100

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in Everjoy Health Group are ranked lower than 3 (%) of all global equities and portfolios over the last 90 days. Despite somewhat weak basic indicators, Everjoy Health may actually be approaching a critical reversion point that can send shares even higher in February 2025.

Jiangxi Ganfeng Lithium

Risk-Adjusted Performance

4 of 100

Insignificant

Compared to the overall equity markets, risk-adjusted returns on investments in Jiangxi Ganfeng Lithium are ranked lower than 4 (%) of all global equities and portfolios over the last 90 days. Despite somewhat weak basic indicators, Jiangxi Ganfeng may actually be approaching a critical reversion point that can send shares even higher in February 2025.

Pair Trading with Everjoy Health and Jiangxi Ganfeng

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

The idea behind Everjoy Health Group and Jiangxi Ganfeng Lithium 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 Crypto Correlations module to use cryptocurrency correlation module to diversify your cryptocurrency portfolio across multiple coins.