Correlation Between Coor Service and Ganfeng Lithium

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

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

Diversification Opportunities for Coor Service and Ganfeng Lithium

0.47

Correlation Coefficient

Coor Service  Ganfeng Lithium

Very weak diversification

The 3 months correlation between Coor and Ganfeng is 0.47. Overlapping area represents the amount of risk that can be diversified away by holding Coor Service Management and Ganfeng Lithium Co in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Ganfeng Lithium and Coor Service 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 Coor Service Management 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 Coor Service i.e., Coor Service and Ganfeng Lithium go up and down completely randomly.

Pair Corralation between Coor Service and Ganfeng Lithium

Assuming the 90 days horizon Coor Service Management is expected to generate 1.29 times more return on investment than Ganfeng Lithium. However, Coor Service is 1.29 times more volatile than Ganfeng Lithium Co. It trades about 0.07 of its potential returns per unit of risk. Ganfeng Lithium Co is currently generating about 0.09 per unit of risk. If you would invest  285.00  in Coor Service Management on December 20, 2024 and sell it today you would earn a total of  30.00  from holding Coor Service Management or generate 10.53% return on investment over 90 days.

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

Coor Service Management  vs.  Ganfeng Lithium Co

Coor Service Management

Risk-Adjusted Performance

Modest

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

Ganfeng Lithium

Risk-Adjusted Performance

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Ganfeng Lithium Co are ranked lower than 6 (%) of all global equities and portfolios over the last 90 days. Despite nearly unsteady technical and fundamental indicators, Ganfeng Lithium reported solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Coor Service and Ganfeng Lithium

The main advantage of trading using opposite Coor Service and Ganfeng Lithium positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Coor Service 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 Coor Service Management 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.

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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 ETF Categories module to list of ETF categories grouped based on various criteria, such as the investment strategy or type of investments.