Correlation Between Jiangxi Ganfeng and Sanbo Hospital

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

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

Diversification Opportunities for Jiangxi Ganfeng and Sanbo Hospital

0.46

Correlation Coefficient

Jiangxi Ganfeng  Sanbo Hospital

Very weak diversification

The 3 months correlation between Jiangxi and Sanbo is 0.46. Overlapping area represents the amount of risk that can be diversified away by holding Jiangxi Ganfeng Lithium and Sanbo Hospital Management in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Sanbo Hospital Management and Jiangxi Ganfeng 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 Jiangxi Ganfeng Lithium are associated (or correlated) with Sanbo Hospital. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Sanbo Hospital Management has no effect on the direction of Jiangxi Ganfeng i.e., Jiangxi Ganfeng and Sanbo Hospital go up and down completely randomly.

Pair Corralation between Jiangxi Ganfeng and Sanbo Hospital

Assuming the 90 days trading horizon Jiangxi Ganfeng Lithium is expected to under-perform the Sanbo Hospital. But the stock apears to be less risky and, when comparing its historical volatility, Jiangxi Ganfeng Lithium is 1.56 times less risky than Sanbo Hospital. The stock trades about -0.1 of its potential returns per unit of risk. The Sanbo Hospital Management is currently generating about 0.07 of returns per unit of risk over similar time horizon. If you would invest  4,640  in Sanbo Hospital Management on November 28, 2024 and sell it today you would earn a total of  534.00  from holding Sanbo Hospital Management or generate 11.51% return on investment over 90 days.

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

Jiangxi Ganfeng Lithium  vs.  Sanbo Hospital Management

Jiangxi Ganfeng Lithium

Risk-Adjusted Performance

Very Weak

Over the last 90 days Jiangxi Ganfeng Lithium has generated negative risk-adjusted returns adding no value to investors with long positions. Despite weak performance in the last few months, the Stock's basic indicators remain somewhat strong which may send shares a bit higher in March 2025. The current disturbance may also be a sign of long term up-swing for the company investors.

Sanbo Hospital Management

Risk-Adjusted Performance

Modest

Compared to the overall equity markets, risk-adjusted returns on investments in Sanbo Hospital Management are ranked lower than 5 (%) of all global equities and portfolios over the last 90 days. Despite somewhat weak basic indicators, Sanbo Hospital sustained solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Jiangxi Ganfeng and Sanbo Hospital

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

The idea behind Jiangxi Ganfeng Lithium and Sanbo Hospital Management 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 Odds Of Bankruptcy module to get analysis of equity chance of financial distress in the next 2 years.