Correlation Between Evergreen International and Acelon Chemicals
Can any of the company-specific risk be diversified away by investing in both Evergreen International 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 Evergreen International and Acelon Chemicals into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Evergreen International Storage and Acelon Chemicals Fiber, you can compare the effects of market volatilities on Evergreen International 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 Evergreen International with a short position of Acelon Chemicals. Check out your portfolio center. Please also check ongoing floating volatility patterns of Evergreen International and Acelon Chemicals.
Diversification Opportunities for Evergreen International and Acelon Chemicals
0.42 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Evergreen and Acelon is 0.42. Overlapping area represents the amount of risk that can be diversified away by holding Evergreen International Storag 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 Evergreen International 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 Evergreen International Storage 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 Evergreen International i.e., Evergreen International and Acelon Chemicals go up and down completely randomly.
Pair Corralation between Evergreen International and Acelon Chemicals
Assuming the 90 days trading horizon Evergreen International Storage is expected to under-perform the Acelon Chemicals. But the stock apears to be less risky and, when comparing its historical volatility, Evergreen International Storage is 3.98 times less risky than Acelon Chemicals. The stock trades about -0.07 of its potential returns per unit of risk. The Acelon Chemicals Fiber is currently generating about 0.1 of returns per unit of risk over similar time horizon. If you would invest 1,295 in Acelon Chemicals Fiber on September 2, 2024 and sell it today you would earn a total of 100.00 from holding Acelon Chemicals Fiber or generate 7.72% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Evergreen International Storag vs. Acelon Chemicals Fiber
Performance |
| Timeline |
| Evergreen International |
| Acelon Chemicals Fiber |
Evergreen International and Acelon Chemicals Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Evergreen International and Acelon Chemicals
The main advantage of trading using opposite Evergreen International and Acelon Chemicals positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Evergreen International 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.| Evergreen International vs. BES Engineering Co | Evergreen International vs. Continental Holdings Corp | Evergreen International vs. Kee Tai Properties | Evergreen International vs. Hung Sheng Construction |
| Acelon Chemicals vs. Chaintech Technology Corp | Acelon Chemicals vs. Avision | Acelon Chemicals vs. Clevo Co | Acelon Chemicals vs. Elitegroup Computer Systems |
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 Suggestion module to get suggestions outside of your existing asset allocation including your own model portfolios.
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