Correlation Between Acelon Chemicals and Joinsoon Electronics
Can any of the company-specific risk be diversified away by investing in both Acelon Chemicals and Joinsoon Electronics 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 Joinsoon Electronics 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 Joinsoon Electronics MFG, you can compare the effects of market volatilities on Acelon Chemicals and Joinsoon Electronics 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 Joinsoon Electronics. Check out your portfolio center. Please also check ongoing floating volatility patterns of Acelon Chemicals and Joinsoon Electronics.
Diversification Opportunities for Acelon Chemicals and Joinsoon Electronics
-0.69 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Acelon and Joinsoon is -0.69. Overlapping area represents the amount of risk that can be diversified away by holding Acelon Chemicals Fiber and Joinsoon Electronics MFG in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Joinsoon Electronics MFG 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 Joinsoon Electronics. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Joinsoon Electronics MFG has no effect on the direction of Acelon Chemicals i.e., Acelon Chemicals and Joinsoon Electronics go up and down completely randomly.
Pair Corralation between Acelon Chemicals and Joinsoon Electronics
Assuming the 90 days trading horizon Acelon Chemicals Fiber is expected to generate 1.51 times more return on investment than Joinsoon Electronics. However, Acelon Chemicals is 1.51 times more volatile than Joinsoon Electronics MFG. It trades about -0.04 of its potential returns per unit of risk. Joinsoon Electronics MFG is currently generating about -0.08 per unit of risk. If you would invest 1,390 in Acelon Chemicals Fiber on September 12, 2024 and sell it today you would lose (70.00) from holding Acelon Chemicals Fiber or give up 5.04% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Acelon Chemicals Fiber vs. Joinsoon Electronics MFG
Performance |
| Timeline |
| Acelon Chemicals Fiber |
| Joinsoon Electronics MFG |
Acelon Chemicals and Joinsoon Electronics Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Acelon Chemicals and Joinsoon Electronics
The main advantage of trading using opposite Acelon Chemicals and Joinsoon Electronics positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Acelon Chemicals position performs unexpectedly, Joinsoon Electronics 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 Joinsoon Electronics will offset losses from the drop in Joinsoon Electronics' long position.| Acelon Chemicals vs. Feng Tay Enterprises | Acelon Chemicals vs. Ruentex Development Co | Acelon Chemicals vs. WiseChip Semiconductor | Acelon Chemicals vs. Novatek Microelectronics Corp |
| Joinsoon Electronics vs. Chung Hwa Chemical | Joinsoon Electronics vs. WinMate Communication INC | Joinsoon Electronics vs. Acelon Chemicals Fiber | Joinsoon Electronics vs. Chief Telecom |
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 Economic Indicators module to top statistical indicators that provide insights into how an economy is performing.
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