Correlation Between Chi Sheng and Acelon Chemicals
Can any of the company-specific risk be diversified away by investing in both Chi Sheng 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 Chi Sheng and Acelon Chemicals into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Chi Sheng Chemical and Acelon Chemicals Fiber, you can compare the effects of market volatilities on Chi Sheng 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 Chi Sheng with a short position of Acelon Chemicals. Check out your portfolio center. Please also check ongoing floating volatility patterns of Chi Sheng and Acelon Chemicals.
Diversification Opportunities for Chi Sheng and Acelon Chemicals
0.52 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Chi and Acelon is 0.52. Overlapping area represents the amount of risk that can be diversified away by holding Chi Sheng Chemical 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 Chi Sheng 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 Chi Sheng Chemical 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 Chi Sheng i.e., Chi Sheng and Acelon Chemicals go up and down completely randomly.
Pair Corralation between Chi Sheng and Acelon Chemicals
Assuming the 90 days trading horizon Chi Sheng is expected to generate 3.41 times less return on investment than Acelon Chemicals. But when comparing it to its historical volatility, Chi Sheng Chemical is 1.12 times less risky than Acelon Chemicals. It trades about 0.01 of its potential returns per unit of risk. Acelon Chemicals Fiber is currently generating about 0.03 of returns per unit of risk over similar time horizon. If you would invest 1,180 in Acelon Chemicals Fiber on September 3, 2024 and sell it today you would earn a total of 215.00 from holding Acelon Chemicals Fiber or generate 18.22% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Chi Sheng Chemical vs. Acelon Chemicals Fiber
Performance |
| Timeline |
| Chi Sheng Chemical |
| Acelon Chemicals Fiber |
Chi Sheng and Acelon Chemicals Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Chi Sheng and Acelon Chemicals
The main advantage of trading using opposite Chi Sheng and Acelon Chemicals positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Chi Sheng 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.| Chi Sheng vs. SciVision Biotech | Chi Sheng vs. WiseChip Semiconductor | Chi Sheng vs. Novatek Microelectronics Corp | Chi Sheng vs. Leader Electronics |
| 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 My Watchlist Analysis module to analyze my current watchlist and to refresh optimization strategy. Macroaxis watchlist is based on self-learning algorithm to remember stocks you like.
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