Correlation Between Shiny Chemical and Acelon Chemicals
Can any of the company-specific risk be diversified away by investing in both Shiny Chemical and Acelon Chemicals 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 Shiny Chemical and Acelon Chemicals into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Shiny Chemical Industrial and Acelon Chemicals Fiber, you can compare the effects of market volatilities on Shiny Chemical and Acelon Chemicals 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 Shiny Chemical with a short position of Acelon Chemicals. Check out your portfolio center. Please also check ongoing floating volatility patterns of Shiny Chemical and Acelon Chemicals.
Diversification Opportunities for Shiny Chemical and Acelon Chemicals
0.16 | Correlation Coefficient |
Average diversification
The 3 months correlation between Shiny and Acelon is 0.16. Overlapping area represents the amount of risk that can be diversified away by holding Shiny Chemical Industrial and Acelon Chemicals Fiber in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Acelon Chemicals Fiber and Shiny Chemical 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 Shiny Chemical Industrial are associated (or correlated) with Acelon Chemicals. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Acelon Chemicals Fiber has no effect on the direction of Shiny Chemical i.e., Shiny Chemical and Acelon Chemicals go up and down completely randomly.
Pair Corralation between Shiny Chemical and Acelon Chemicals
Assuming the 90 days trading horizon Shiny Chemical Industrial is expected to generate 0.98 times more return on investment than Acelon Chemicals. However, Shiny Chemical Industrial is 1.02 times less risky than Acelon Chemicals. It trades about 0.05 of its potential returns per unit of risk. Acelon Chemicals Fiber is currently generating about 0.03 per unit of risk. If you would invest 11,900 in Shiny Chemical Industrial on September 3, 2024 and sell it today you would earn a total of 4,500 from holding Shiny Chemical Industrial or generate 37.82% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Shiny Chemical Industrial vs. Acelon Chemicals Fiber
Performance |
| Timeline |
| Shiny Chemical Industrial |
| Acelon Chemicals Fiber |
Shiny Chemical and Acelon Chemicals Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Shiny Chemical and Acelon Chemicals
The main advantage of trading using opposite Shiny Chemical and Acelon Chemicals positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Shiny Chemical position performs unexpectedly, Acelon Chemicals 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 Acelon Chemicals will offset losses from the drop in Acelon Chemicals' long position.| Shiny Chemical vs. China Steel Chemical | Shiny Chemical vs. TTET Union Corp | Shiny Chemical vs. Eternal Materials Co | Shiny Chemical vs. Yung Chi Paint |
| Acelon Chemicals vs. Tainan Spinning Co | Acelon Chemicals vs. Chia Her Industrial | Acelon Chemicals vs. WiseChip Semiconductor | Acelon Chemicals vs. Novatek Microelectronics 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 Portfolio Diagnostics module to use generated alerts and portfolio events aggregator to diagnose current holdings.
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