Correlation Between Century Wind and ALFORMER Industrial
Can any of the company-specific risk be diversified away by investing in both Century Wind and ALFORMER Industrial 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 Century Wind and ALFORMER Industrial into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Century Wind Power and ALFORMER Industrial Co, you can compare the effects of market volatilities on Century Wind and ALFORMER Industrial 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 Century Wind with a short position of ALFORMER Industrial. Check out your portfolio center. Please also check ongoing floating volatility patterns of Century Wind and ALFORMER Industrial.
Diversification Opportunities for Century Wind and ALFORMER Industrial
-0.77 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between Century and ALFORMER is -0.77. Overlapping area represents the amount of risk that can be diversified away by holding Century Wind Power and ALFORMER Industrial Co in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on ALFORMER Industrial and Century Wind 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 Century Wind Power are associated (or correlated) with ALFORMER Industrial. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of ALFORMER Industrial has no effect on the direction of Century Wind i.e., Century Wind and ALFORMER Industrial go up and down completely randomly.
Pair Corralation between Century Wind and ALFORMER Industrial
Assuming the 90 days trading horizon Century Wind is expected to generate 1.69 times less return on investment than ALFORMER Industrial. But when comparing it to its historical volatility, Century Wind Power is 1.03 times less risky than ALFORMER Industrial. It trades about 0.05 of its potential returns per unit of risk. ALFORMER Industrial Co is currently generating about 0.09 of returns per unit of risk over similar time horizon. If you would invest 2,655 in ALFORMER Industrial Co on August 26, 2024 and sell it today you would earn a total of 1,820 from holding ALFORMER Industrial Co or generate 68.55% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Century Wind Power vs. ALFORMER Industrial Co
Performance |
| Timeline |
| Century Wind Power |
| ALFORMER Industrial |
Century Wind and ALFORMER Industrial Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Century Wind and ALFORMER Industrial
The main advantage of trading using opposite Century Wind and ALFORMER Industrial positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Century Wind position performs unexpectedly, ALFORMER Industrial 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 ALFORMER Industrial will offset losses from the drop in ALFORMER Industrial's long position.| Century Wind vs. United Integrated Services | Century Wind vs. CTCI Corp | Century Wind vs. Ruentex Engineering Construction | Century Wind vs. BES Engineering Co |
| ALFORMER Industrial vs. Victory New Materials | ALFORMER Industrial vs. Chialin Precision Industrial | ALFORMER Industrial vs. Nankang Rubber Tire | ALFORMER Industrial vs. Eternal Materials 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 Piotroski F Score module to get Piotroski F Score based on the binary analysis strategy of nine different fundamentals.
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