Correlation Between GrafTech International and CBAK Energy

Can any of the company-specific risk be diversified away by investing in both GrafTech International and CBAK Energy 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 GrafTech International and CBAK Energy into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between GrafTech International and CBAK Energy Technology, you can compare the effects of market volatilities on GrafTech International and CBAK Energy 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 GrafTech International with a short position of CBAK Energy. Check out your portfolio center. Please also check ongoing floating volatility patterns of GrafTech International and CBAK Energy.

Diversification Opportunities for GrafTech International and CBAK Energy

0.32

Correlation Coefficient

GrafTech International  CBAK Energy

Weak diversification

The 3 months correlation between GrafTech and CBAK is 0.32. Overlapping area represents the amount of risk that can be diversified away by holding GrafTech International and CBAK Energy Technology in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on CBAK Energy Technology and GrafTech International 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 GrafTech International are associated (or correlated) with CBAK Energy. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of CBAK Energy Technology has no effect on the direction of GrafTech International i.e., GrafTech International and CBAK Energy go up and down completely randomly.

Pair Corralation between GrafTech International and CBAK Energy

Considering the 90-day investment horizon GrafTech International is expected to generate 2.05 times more return on investment than CBAK Energy. However, GrafTech International is 2.05 times more volatile than CBAK Energy Technology. It trades about 0.13 of its potential returns per unit of risk. CBAK Energy Technology is currently generating about 0.03 per unit of risk. If you would invest  82.00  in GrafTech International on May 10, 2025 and sell it today you would earn a total of  43.00  from holding GrafTech International or generate 52.44% return on investment over 90 days.

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

GrafTech International  vs.  CBAK Energy Technology

GrafTech International

Risk-Adjusted Performance

Fair

Compared to the overall equity markets, risk-adjusted returns on investments in GrafTech International are ranked lower than 9 (%) of all global equities and portfolios over the last 90 days. Despite nearly weak basic indicators, GrafTech International reported solid returns over the last few months and may actually be approaching a breakup point.

CBAK Energy Technology

Risk-Adjusted Performance

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in CBAK Energy Technology are ranked lower than 2 (%) of all global equities and portfolios over the last 90 days. In spite of comparatively weak basic indicators, CBAK Energy may actually be approaching a critical reversion point that can send shares even higher in September 2025.

Pair Trading with GrafTech International and CBAK Energy

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

The idea behind GrafTech International and CBAK Energy Technology 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.