Correlation Between Acelon Chemicals and Far EasTone
Can any of the company-specific risk be diversified away by investing in both Acelon Chemicals and Far EasTone 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 Far EasTone 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 Far EasTone Telecommunications, you can compare the effects of market volatilities on Acelon Chemicals and Far EasTone 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 Far EasTone. Check out your portfolio center. Please also check ongoing floating volatility patterns of Acelon Chemicals and Far EasTone.
Diversification Opportunities for Acelon Chemicals and Far EasTone
0.12 | Correlation Coefficient |
Average diversification
The 3 months correlation between Acelon and Far is 0.12. Overlapping area represents the amount of risk that can be diversified away by holding Acelon Chemicals Fiber and Far EasTone Telecommunications in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Far EasTone Telecomm 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 Far EasTone. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Far EasTone Telecomm has no effect on the direction of Acelon Chemicals i.e., Acelon Chemicals and Far EasTone go up and down completely randomly.
Pair Corralation between Acelon Chemicals and Far EasTone
Assuming the 90 days trading horizon Acelon Chemicals Fiber is expected to under-perform the Far EasTone. In addition to that, Acelon Chemicals is 1.58 times more volatile than Far EasTone Telecommunications. It trades about -0.09 of its total potential returns per unit of risk. Far EasTone Telecommunications is currently generating about -0.02 per unit of volatility. If you would invest 8,950 in Far EasTone Telecommunications on October 21, 2024 and sell it today you would lose (40.00) from holding Far EasTone Telecommunications or give up 0.45% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Acelon Chemicals Fiber vs. Far EasTone Telecommunications
Performance |
| Timeline |
| Acelon Chemicals Fiber |
| Far EasTone Telecomm |
Acelon Chemicals and Far EasTone Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Acelon Chemicals and Far EasTone
The main advantage of trading using opposite Acelon Chemicals and Far EasTone positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Acelon Chemicals position performs unexpectedly, Far EasTone 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 Far EasTone will offset losses from the drop in Far EasTone's long position.| Acelon Chemicals vs. Honmyue Enterprise Co | Acelon Chemicals vs. Tainan Spinning Co | Acelon Chemicals vs. Chia Her Industrial | Acelon Chemicals vs. Zig Sheng Industrial |
| Far EasTone vs. Taiwan Mobile Co | Far EasTone vs. Chunghwa Telecom Co | Far EasTone vs. President Chain Store | Far EasTone vs. Formosa Petrochemical 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 Bollinger Bands module to use Bollinger Bands indicator to analyze target price for a given investing horizon.
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