Correlation Between AMB Financial and China Solar

Can any of the company-specific risk be diversified away by investing in both AMB Financial and China Solar 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 AMB Financial and China Solar into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between AMB Financial Corp and China Solar Cln, you can compare the effects of market volatilities on AMB Financial and China Solar 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 AMB Financial with a short position of China Solar. Check out your portfolio center. Please also check ongoing floating volatility patterns of AMB Financial and China Solar.

Diversification Opportunities for AMB Financial and China Solar

0.6

Correlation Coefficient

AMB Financial  China Solar

Poor diversification

The 3 months correlation between AMB and China is 0.6. Overlapping area represents the amount of risk that can be diversified away by holding AMB Financial Corp and China Solar Cln in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on China Solar Cln and AMB Financial 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 AMB Financial Corp are associated (or correlated) with China Solar. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of China Solar Cln has no effect on the direction of AMB Financial i.e., AMB Financial and China Solar go up and down completely randomly.

Pair Corralation between AMB Financial and China Solar

Given the investment horizon of 90 days AMB Financial is expected to generate 15.94 times less return on investment than China Solar. But when comparing it to its historical volatility, AMB Financial Corp is 23.82 times less risky than China Solar. It trades about 0.32 of its potential returns per unit of risk. China Solar Cln is currently generating about 0.21 of returns per unit of risk over similar time horizon. If you would invest  0.76  in China Solar Cln on September 15, 2025 and sell it today you would earn a total of  2.24  from holding China Solar Cln or generate 294.74% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Significant
Accuracy	98.48%
Values	Daily Returns

AMB Financial Corp  vs.  China Solar Cln

AMB Financial Corp

Risk-Adjusted Performance

Solid

Compared to the overall equity markets, risk-adjusted returns on investments in AMB Financial Corp are ranked lower than 25 (%) of all global equities and portfolios over the last 90 days. In spite of rather weak technical and fundamental indicators, AMB Financial exhibited solid returns over the last few months and may actually be approaching a breakup point.

China Solar Cln

Risk-Adjusted Performance

Solid

Compared to the overall equity markets, risk-adjusted returns on investments in China Solar Cln are ranked lower than 16 (%) of all global equities and portfolios over the last 90 days. Despite quite fragile basic indicators, China Solar disclosed solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with AMB Financial and China Solar

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

The idea behind AMB Financial Corp and China Solar Cln 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 Performance Analysis module to check effects of mean-variance optimization against your current asset allocation.