Correlation Between Acelon Chemicals and International CSRC
Can any of the company-specific risk be diversified away by investing in both Acelon Chemicals and International CSRC 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 International CSRC 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 International CSRC Investment, you can compare the effects of market volatilities on Acelon Chemicals and International CSRC 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 International CSRC. Check out your portfolio center. Please also check ongoing floating volatility patterns of Acelon Chemicals and International CSRC.
Diversification Opportunities for Acelon Chemicals and International CSRC
-0.07 | Correlation Coefficient |
Good diversification
The 3 months correlation between Acelon and International is -0.07. Overlapping area represents the amount of risk that can be diversified away by holding Acelon Chemicals Fiber and International CSRC Investment in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on International CSRC 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 International CSRC. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of International CSRC has no effect on the direction of Acelon Chemicals i.e., Acelon Chemicals and International CSRC go up and down completely randomly.
Pair Corralation between Acelon Chemicals and International CSRC
Assuming the 90 days trading horizon Acelon Chemicals Fiber is expected to generate 1.69 times more return on investment than International CSRC. However, Acelon Chemicals is 1.69 times more volatile than International CSRC Investment. It trades about 0.03 of its potential returns per unit of risk. International CSRC Investment is currently generating about -0.04 per unit of risk. If you would invest 1,180 in Acelon Chemicals Fiber on September 3, 2024 and sell it today you would earn a total of 215.00 from holding Acelon Chemicals Fiber or generate 18.22% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Acelon Chemicals Fiber vs. International CSRC Investment
Performance |
| Timeline |
| Acelon Chemicals Fiber |
| International CSRC |
Acelon Chemicals and International CSRC Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Acelon Chemicals and International CSRC
The main advantage of trading using opposite Acelon Chemicals and International CSRC positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Acelon Chemicals position performs unexpectedly, International CSRC 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 International CSRC will offset losses from the drop in International CSRC's long position.| Acelon Chemicals vs. Tainan Spinning Co | Acelon Chemicals vs. Chia Her Industrial | Acelon Chemicals vs. WiseChip Semiconductor | Acelon Chemicals vs. Novatek Microelectronics Corp |
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.
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