Correlation Between Avision and Acelon Chemicals
Can any of the company-specific risk be diversified away by investing in both Avision 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 Avision and Acelon Chemicals into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Avision and Acelon Chemicals Fiber, you can compare the effects of market volatilities on Avision 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 Avision with a short position of Acelon Chemicals. Check out your portfolio center. Please also check ongoing floating volatility patterns of Avision and Acelon Chemicals.
Diversification Opportunities for Avision and Acelon Chemicals
0.83 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between Avision and Acelon is 0.83. Overlapping area represents the amount of risk that can be diversified away by holding Avision 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 Avision 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 Avision 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 Avision i.e., Avision and Acelon Chemicals go up and down completely randomly.
Pair Corralation between Avision and Acelon Chemicals
Assuming the 90 days trading horizon Avision is expected to generate 2.37 times more return on investment than Acelon Chemicals. However, Avision is 2.37 times more volatile than Acelon Chemicals Fiber. It trades about 0.3 of its potential returns per unit of risk. Acelon Chemicals Fiber is currently generating about 0.69 per unit of risk. If you would invest 420.00 in Avision on November 29, 2024 and sell it today you would earn a total of 65.00 from holding Avision or generate 15.48% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Avision vs. Acelon Chemicals Fiber
Performance |
| Timeline |
| Avision |
| Acelon Chemicals Fiber |
Avision and Acelon Chemicals Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Avision and Acelon Chemicals
The main advantage of trading using opposite Avision and Acelon Chemicals positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Avision 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.| Avision vs. KYE Systems Corp | Avision vs. Clevo Co | Avision vs. Silicon Integrated Systems | Avision vs. Ability Enterprise Co |
| Acelon Chemicals vs. Honmyue Enterprise Co | Acelon Chemicals vs. Tainan Spinning Co | Acelon Chemicals vs. Chia Her Industrial | Acelon Chemicals vs. Zig Sheng Industrial |
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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