Correlation Between Acelon Chemicals and Tehmag Foods
Can any of the company-specific risk be diversified away by investing in both Acelon Chemicals and Tehmag Foods 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 Acelon Chemicals and Tehmag Foods into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Acelon Chemicals Fiber and Tehmag Foods, you can compare the effects of market volatilities on Acelon Chemicals and Tehmag Foods 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 Acelon Chemicals with a short position of Tehmag Foods. Check out your portfolio center. Please also check ongoing floating volatility patterns of Acelon Chemicals and Tehmag Foods.
Diversification Opportunities for Acelon Chemicals and Tehmag Foods
-0.64 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Acelon and Tehmag is -0.64. Overlapping area represents the amount of risk that can be diversified away by holding Acelon Chemicals Fiber and Tehmag Foods in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Tehmag Foods and Acelon Chemicals 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 Acelon Chemicals Fiber are associated (or correlated) with Tehmag Foods. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Tehmag Foods has no effect on the direction of Acelon Chemicals i.e., Acelon Chemicals and Tehmag Foods go up and down completely randomly.
Pair Corralation between Acelon Chemicals and Tehmag Foods
Assuming the 90 days trading horizon Acelon Chemicals Fiber is expected to generate 10.3 times more return on investment than Tehmag Foods. However, Acelon Chemicals is 10.3 times more volatile than Tehmag Foods. It trades about 0.16 of its potential returns per unit of risk. Tehmag Foods is currently generating about -0.11 per unit of risk. If you would invest 1,320 in Acelon Chemicals Fiber on August 28, 2024 and sell it today you would earn a total of 180.00 from holding Acelon Chemicals Fiber or generate 13.64% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 95.45% |
| Values | Daily Returns |
Acelon Chemicals Fiber vs. Tehmag Foods
Performance |
| Timeline |
| Acelon Chemicals Fiber |
| Tehmag Foods |
Acelon Chemicals and Tehmag Foods Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Acelon Chemicals and Tehmag Foods
The main advantage of trading using opposite Acelon Chemicals and Tehmag Foods positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Acelon Chemicals position performs unexpectedly, Tehmag Foods 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 Tehmag Foods will offset losses from the drop in Tehmag Foods' long position.| Acelon Chemicals vs. Taiwan Semiconductor Manufacturing | Acelon Chemicals vs. Hon Hai Precision | Acelon Chemicals vs. MediaTek | Acelon Chemicals vs. Chunghwa Telecom Co |
| Tehmag Foods vs. Grand Pacific Petrochemical | Tehmag Foods vs. Sunspring Metal Corp | Tehmag Foods vs. Acelon Chemicals Fiber | Tehmag Foods vs. Chi Sheng Chemical |
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 Equity Analysis module to research over 250,000 global equities including funds, stocks and ETFs to find investment opportunities.
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