Correlation Between Advanced Ceramic and Excelsior Medical
Can any of the company-specific risk be diversified away by investing in both Advanced Ceramic and Excelsior Medical 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 Advanced Ceramic and Excelsior Medical into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Advanced Ceramic X and Excelsior Medical Co, you can compare the effects of market volatilities on Advanced Ceramic and Excelsior Medical 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 Advanced Ceramic with a short position of Excelsior Medical. Check out your portfolio center. Please also check ongoing floating volatility patterns of Advanced Ceramic and Excelsior Medical.
Diversification Opportunities for Advanced Ceramic and Excelsior Medical
0.45 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Advanced and Excelsior is 0.45. Overlapping area represents the amount of risk that can be diversified away by holding Advanced Ceramic X and Excelsior Medical Co in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Excelsior Medical and Advanced Ceramic 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 Advanced Ceramic X are associated (or correlated) with Excelsior Medical. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Excelsior Medical has no effect on the direction of Advanced Ceramic i.e., Advanced Ceramic and Excelsior Medical go up and down completely randomly.
Pair Corralation between Advanced Ceramic and Excelsior Medical
Assuming the 90 days trading horizon Advanced Ceramic X is expected to generate 2.97 times more return on investment than Excelsior Medical. However, Advanced Ceramic is 2.97 times more volatile than Excelsior Medical Co. It trades about 0.01 of its potential returns per unit of risk. Excelsior Medical Co is currently generating about 0.01 per unit of risk. If you would invest 18,189 in Advanced Ceramic X on September 12, 2024 and sell it today you would lose (389.00) from holding Advanced Ceramic X or give up 2.14% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Advanced Ceramic X vs. Excelsior Medical Co
Performance |
| Timeline |
| Advanced Ceramic X |
| Excelsior Medical |
Advanced Ceramic and Excelsior Medical Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Advanced Ceramic and Excelsior Medical
The main advantage of trading using opposite Advanced Ceramic and Excelsior Medical positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Advanced Ceramic position performs unexpectedly, Excelsior Medical 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 Excelsior Medical will offset losses from the drop in Excelsior Medical's long position.| Advanced Ceramic vs. Chien Kuo Construction | Advanced Ceramic vs. Onano Industrial Corp | Advanced Ceramic vs. Tsang Yow Industrial | Advanced Ceramic vs. Singtex Industrial Co |
| Excelsior Medical vs. Apex Biotechnology Corp | Excelsior Medical vs. Ruentex Development Co | Excelsior Medical vs. WiseChip Semiconductor | Excelsior Medical 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 Analyst Advice module to analyst recommendations and target price estimates broken down by several categories.
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