Correlation Between Acelon Chemicals and Pacific Hospital
Can any of the company-specific risk be diversified away by investing in both Acelon Chemicals and Pacific Hospital 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 Pacific Hospital 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 Pacific Hospital Supply, you can compare the effects of market volatilities on Acelon Chemicals and Pacific Hospital 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 Pacific Hospital. Check out your portfolio center. Please also check ongoing floating volatility patterns of Acelon Chemicals and Pacific Hospital.
Diversification Opportunities for Acelon Chemicals and Pacific Hospital
0.41 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Acelon and Pacific is 0.41. Overlapping area represents the amount of risk that can be diversified away by holding Acelon Chemicals Fiber and Pacific Hospital Supply in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Pacific Hospital Supply 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 Pacific Hospital. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Pacific Hospital Supply has no effect on the direction of Acelon Chemicals i.e., Acelon Chemicals and Pacific Hospital go up and down completely randomly.
Pair Corralation between Acelon Chemicals and Pacific Hospital
Assuming the 90 days trading horizon Acelon Chemicals Fiber is expected to generate 5.1 times more return on investment than Pacific Hospital. However, Acelon Chemicals is 5.1 times more volatile than Pacific Hospital Supply. It trades about 0.07 of its potential returns per unit of risk. Pacific Hospital Supply is currently generating about 0.07 per unit of risk. If you would invest 1,245 in Acelon Chemicals Fiber on August 31, 2024 and sell it today you would earn a total of 140.00 from holding Acelon Chemicals Fiber or generate 11.24% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Acelon Chemicals Fiber vs. Pacific Hospital Supply
Performance |
| Timeline |
| Acelon Chemicals Fiber |
| Pacific Hospital Supply |
Acelon Chemicals and Pacific Hospital Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Acelon Chemicals and Pacific Hospital
The main advantage of trading using opposite Acelon Chemicals and Pacific Hospital positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Acelon Chemicals position performs unexpectedly, Pacific Hospital 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 Pacific Hospital will offset losses from the drop in Pacific Hospital's long position.| Acelon Chemicals vs. Chaintech Technology Corp | Acelon Chemicals vs. AVerMedia Technologies | Acelon Chemicals vs. Avision | Acelon Chemicals vs. Clevo Co |
| Pacific Hospital vs. StShine Optical Co | Pacific Hospital vs. Bioteque | Pacific Hospital vs. United Orthopedic | Pacific Hospital vs. TTY Biopharm Co |
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 Alpha Finder module to use alpha and beta coefficients to find investment opportunities after accounting for the risk.
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