Correlation Between Carnival Industrial and Acelon Chemicals
Can any of the company-specific risk be diversified away by investing in both Carnival Industrial and Acelon Chemicals 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 Carnival Industrial and Acelon Chemicals into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Carnival Industrial Corp and Acelon Chemicals Fiber, you can compare the effects of market volatilities on Carnival Industrial and Acelon Chemicals 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 Carnival Industrial with a short position of Acelon Chemicals. Check out your portfolio center. Please also check ongoing floating volatility patterns of Carnival Industrial and Acelon Chemicals.
Diversification Opportunities for Carnival Industrial and Acelon Chemicals
-0.7 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Carnival and Acelon is -0.7. Overlapping area represents the amount of risk that can be diversified away by holding Carnival Industrial Corp and Acelon Chemicals Fiber in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Acelon Chemicals Fiber and Carnival Industrial 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 Carnival Industrial Corp are associated (or correlated) with Acelon Chemicals. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Acelon Chemicals Fiber has no effect on the direction of Carnival Industrial i.e., Carnival Industrial and Acelon Chemicals go up and down completely randomly.
Pair Corralation between Carnival Industrial and Acelon Chemicals
Assuming the 90 days trading horizon Carnival Industrial Corp is expected to under-perform the Acelon Chemicals. But the stock apears to be less risky and, when comparing its historical volatility, Carnival Industrial Corp is 2.02 times less risky than Acelon Chemicals. The stock trades about -0.07 of its potential returns per unit of risk. The Acelon Chemicals Fiber is currently generating about 0.04 of returns per unit of risk over similar time horizon. If you would invest 1,130 in Acelon Chemicals Fiber on September 2, 2024 and sell it today you would earn a total of 265.00 from holding Acelon Chemicals Fiber or generate 23.45% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 99.73% |
| Values | Daily Returns |
Carnival Industrial Corp vs. Acelon Chemicals Fiber
Performance |
| Timeline |
| Carnival Industrial Corp |
| Acelon Chemicals Fiber |
Carnival Industrial and Acelon Chemicals Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Carnival Industrial and Acelon Chemicals
The main advantage of trading using opposite Carnival Industrial and Acelon Chemicals positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Carnival Industrial position performs unexpectedly, Acelon Chemicals 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 Acelon Chemicals will offset losses from the drop in Acelon Chemicals' long position.| Carnival Industrial vs. China Times Publishing | Carnival Industrial vs. Far EasTone Telecommunications | Carnival Industrial vs. Cameo Communications | Carnival Industrial vs. WinMate Communication INC |
| Acelon Chemicals vs. Chaintech Technology Corp | Acelon Chemicals vs. Avision | Acelon Chemicals vs. Clevo Co | Acelon Chemicals vs. Elitegroup Computer Systems |
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 Top Crypto Exchanges module to search and analyze digital assets across top global cryptocurrency exchanges.
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