Correlation Between Asahi Kasei and Ganfeng Lithium
Can any of the company-specific risk be diversified away by investing in both Asahi Kasei 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 Asahi Kasei and Ganfeng Lithium into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Asahi Kasei and Ganfeng Lithium Co, you can compare the effects of market volatilities on Asahi Kasei 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 Asahi Kasei with a short position of Ganfeng Lithium. Check out your portfolio center. Please also check ongoing floating volatility patterns of Asahi Kasei and Ganfeng Lithium.
Diversification Opportunities for Asahi Kasei and Ganfeng Lithium
-0.48 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Asahi and Ganfeng is -0.48. Overlapping area represents the amount of risk that can be diversified away by holding Asahi Kasei and Ganfeng Lithium Co in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Ganfeng Lithium and Asahi Kasei 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 Asahi Kasei 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 Asahi Kasei i.e., Asahi Kasei and Ganfeng Lithium go up and down completely randomly.
Pair Corralation between Asahi Kasei and Ganfeng Lithium
Assuming the 90 days horizon Asahi Kasei is expected to generate 1.27 times less return on investment than Ganfeng Lithium. But when comparing it to its historical volatility, Asahi Kasei is 2.39 times less risky than Ganfeng Lithium. It trades about 0.05 of its potential returns per unit of risk. Ganfeng Lithium Co is currently generating about 0.03 of returns per unit of risk over similar time horizon. If you would invest 245.00 in Ganfeng Lithium Co on November 3, 2024 and sell it today you would earn a total of 3.00 from holding Ganfeng Lithium Co or generate 1.22% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 54.0% |
| Values | Daily Returns |
Asahi Kasei vs. Ganfeng Lithium Co
Performance |
| Timeline |
| Asahi Kasei |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Very Weak
| Ganfeng Lithium |
Asahi Kasei and Ganfeng Lithium Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Asahi Kasei and Ganfeng Lithium
The main advantage of trading using opposite Asahi Kasei and Ganfeng Lithium positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Asahi Kasei 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.| Asahi Kasei vs. Altech Batteries Limited | Asahi Kasei vs. Alumifuel Pwr Corp | Asahi Kasei vs. Shin Etsu Chemical Co | Asahi Kasei vs. ASP Isotopes Common |
| Ganfeng Lithium vs. BioLargo | Ganfeng Lithium vs. Shin Etsu Chemical Co | Ganfeng Lithium vs. Lsb Industries | Ganfeng Lithium vs. Braskem SA Class |
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 Commodity Directory module to find actively traded commodities issued by global exchanges.
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