Correlation Between Acelon Chemicals and Dow Jones
Can any of the company-specific risk be diversified away by investing in both Acelon Chemicals and Dow Jones 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 Dow Jones 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 Dow Jones Industrial, you can compare the effects of market volatilities on Acelon Chemicals and Dow Jones 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 Dow Jones. Check out your portfolio center. Please also check ongoing floating volatility patterns of Acelon Chemicals and Dow Jones.
Diversification Opportunities for Acelon Chemicals and Dow Jones
0.83 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between Acelon and Dow is 0.83. Overlapping area represents the amount of risk that can be diversified away by holding Acelon Chemicals Fiber and Dow Jones Industrial in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Dow Jones Industrial 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 Dow Jones. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Dow Jones Industrial has no effect on the direction of Acelon Chemicals i.e., Acelon Chemicals and Dow Jones go up and down completely randomly.
Pair Corralation between Acelon Chemicals and Dow Jones
Assuming the 90 days trading horizon Acelon Chemicals Fiber is expected to generate 4.34 times more return on investment than Dow Jones. However, Acelon Chemicals is 4.34 times more volatile than Dow Jones Industrial. It trades about 0.12 of its potential returns per unit of risk. Dow Jones Industrial is currently generating about 0.27 per unit of risk. If you would invest 1,280 in Acelon Chemicals Fiber on August 30, 2024 and sell it today you would earn a total of 125.00 from holding Acelon Chemicals Fiber or generate 9.77% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Acelon Chemicals Fiber vs. Dow Jones Industrial
Performance |
| Timeline |
Acelon Chemicals and Dow Jones Volatility Contrast
Predicted Return Density |
| Returns |
Acelon Chemicals Fiber
Pair trading matchups for Acelon Chemicals
Dow Jones Industrial
Pair trading matchups for Dow Jones
Pair Trading with Acelon Chemicals and Dow Jones
The main advantage of trading using opposite Acelon Chemicals and Dow Jones positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Acelon Chemicals position performs unexpectedly, Dow Jones 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 Dow Jones will offset losses from the drop in Dow Jones' long position.| Acelon Chemicals vs. Yulon Finance Corp | Acelon Chemicals vs. Taiwan Secom Co | Acelon Chemicals vs. Great Wall Enterprise |
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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 ETF Categories module to list of ETF categories grouped based on various criteria, such as the investment strategy or type of investments.
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