Correlation Between Jiangxi Ganfeng and Hunan Kaimeite

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Can any of the company-specific risk be diversified away by investing in both Jiangxi Ganfeng and Hunan Kaimeite 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 Hunan Kaimeite 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 Hunan Kaimeite Gases, you can compare the effects of market volatilities on Jiangxi Ganfeng and Hunan Kaimeite 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 Hunan Kaimeite. Check out your portfolio center. Please also check ongoing floating volatility patterns of Jiangxi Ganfeng and Hunan Kaimeite.

Diversification Opportunities for Jiangxi Ganfeng and Hunan Kaimeite

0.9
  Correlation Coefficient

Almost no diversification

The 3 months correlation between Jiangxi and Hunan is 0.9. Overlapping area represents the amount of risk that can be diversified away by holding Jiangxi Ganfeng Lithium and Hunan Kaimeite Gases in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Hunan Kaimeite Gases 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 Hunan Kaimeite. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Hunan Kaimeite Gases has no effect on the direction of Jiangxi Ganfeng i.e., Jiangxi Ganfeng and Hunan Kaimeite go up and down completely randomly.

Pair Corralation between Jiangxi Ganfeng and Hunan Kaimeite

Assuming the 90 days trading horizon Jiangxi Ganfeng Lithium is expected to generate 0.7 times more return on investment than Hunan Kaimeite. However, Jiangxi Ganfeng Lithium is 1.44 times less risky than Hunan Kaimeite. It trades about 0.28 of its potential returns per unit of risk. Hunan Kaimeite Gases is currently generating about 0.15 per unit of risk. If you would invest  3,893  in Jiangxi Ganfeng Lithium on August 13, 2025 and sell it today you would earn a total of  3,043  from holding Jiangxi Ganfeng Lithium or generate 78.17% return on investment over 90 days.
Time Period3 Months [change]
DirectionMoves Together 
StrengthVery Strong
Accuracy100.0%
ValuesDaily Returns

Jiangxi Ganfeng Lithium  vs.  Hunan Kaimeite Gases

 Performance 
       Timeline  
Jiangxi Ganfeng Lithium 

Risk-Adjusted Performance

Solid

 
Weak
 
Strong
Compared to the overall equity markets, risk-adjusted returns on investments in Jiangxi Ganfeng Lithium are ranked lower than 21 (%) of all global equities and portfolios over the last 90 days. Despite somewhat weak basic indicators, Jiangxi Ganfeng sustained solid returns over the last few months and may actually be approaching a breakup point.
Hunan Kaimeite Gases 

Risk-Adjusted Performance

Good

 
Weak
 
Strong
Compared to the overall equity markets, risk-adjusted returns on investments in Hunan Kaimeite Gases are ranked lower than 11 (%) of all global equities and portfolios over the last 90 days. Despite somewhat weak basic indicators, Hunan Kaimeite sustained solid returns over the last few months and may actually be approaching a breakup point.

Jiangxi Ganfeng and Hunan Kaimeite Volatility Contrast

   Predicted Return Density   
       Returns  

Pair Trading with Jiangxi Ganfeng and Hunan Kaimeite

The main advantage of trading using opposite Jiangxi Ganfeng and Hunan Kaimeite positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Jiangxi Ganfeng position performs unexpectedly, Hunan Kaimeite 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 Hunan Kaimeite will offset losses from the drop in Hunan Kaimeite's long position.
The idea behind Jiangxi Ganfeng Lithium and Hunan Kaimeite Gases 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 Headlines Timeline module to stay connected to all market stories and filter out noise. Drill down to analyze hype elasticity.

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