Correlation Between Acelon Chemicals and China Times
Can any of the company-specific risk be diversified away by investing in both Acelon Chemicals and China Times 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 China Times 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 China Times Publishing, you can compare the effects of market volatilities on Acelon Chemicals and China Times 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 China Times. Check out your portfolio center. Please also check ongoing floating volatility patterns of Acelon Chemicals and China Times.
Diversification Opportunities for Acelon Chemicals and China Times
-0.65 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Acelon and China is -0.65. Overlapping area represents the amount of risk that can be diversified away by holding Acelon Chemicals Fiber and China Times Publishing in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on China Times Publishing 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 China Times. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of China Times Publishing has no effect on the direction of Acelon Chemicals i.e., Acelon Chemicals and China Times go up and down completely randomly.
Pair Corralation between Acelon Chemicals and China Times
Assuming the 90 days trading horizon Acelon Chemicals is expected to generate 2.48 times less return on investment than China Times. But when comparing it to its historical volatility, Acelon Chemicals Fiber is 1.85 times less risky than China Times. It trades about 0.01 of its potential returns per unit of risk. China Times Publishing is currently generating about 0.02 of returns per unit of risk over similar time horizon. If you would invest 2,020 in China Times Publishing on November 1, 2024 and sell it today you would lose (100.00) from holding China Times Publishing or give up 4.95% 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. China Times Publishing
Performance |
| Timeline |
| Acelon Chemicals Fiber |
| China Times Publishing |
Acelon Chemicals and China Times Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Acelon Chemicals and China Times
The main advantage of trading using opposite Acelon Chemicals and China Times positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Acelon Chemicals position performs unexpectedly, China Times 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 China Times will offset losses from the drop in China Times' 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 |
| China Times vs. Asmedia Technology | China Times vs. Everlight Electronics Co | China Times vs. U Media Communications | China Times vs. MediaTek |
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 Share Portfolio module to track or share privately all of your investments from the convenience of any device.
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