Correlation Between EirGenix and Acelon Chemicals
Can any of the company-specific risk be diversified away by investing in both EirGenix 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 EirGenix and Acelon Chemicals into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between EirGenix and Acelon Chemicals Fiber, you can compare the effects of market volatilities on EirGenix 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 EirGenix with a short position of Acelon Chemicals. Check out your portfolio center. Please also check ongoing floating volatility patterns of EirGenix and Acelon Chemicals.
Diversification Opportunities for EirGenix and Acelon Chemicals
0.49 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between EirGenix and Acelon is 0.49. Overlapping area represents the amount of risk that can be diversified away by holding EirGenix 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 EirGenix 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 EirGenix 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 EirGenix i.e., EirGenix and Acelon Chemicals go up and down completely randomly.
Pair Corralation between EirGenix and Acelon Chemicals
Assuming the 90 days trading horizon EirGenix is expected to under-perform the Acelon Chemicals. But the stock apears to be less risky and, when comparing its historical volatility, EirGenix is 3.45 times less risky than Acelon Chemicals. The stock trades about -0.02 of its potential returns per unit of risk. The Acelon Chemicals Fiber is currently generating about 0.12 of returns per unit of risk over similar time horizon. If you would invest 1,320 in Acelon Chemicals Fiber on August 26, 2024 and sell it today you would earn a total of 130.00 from holding Acelon Chemicals Fiber or generate 9.85% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
EirGenix vs. Acelon Chemicals Fiber
Performance |
| Timeline |
| EirGenix |
| Acelon Chemicals Fiber |
EirGenix and Acelon Chemicals Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with EirGenix and Acelon Chemicals
The main advantage of trading using opposite EirGenix and Acelon Chemicals positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if EirGenix 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.| EirGenix vs. Acelon Chemicals Fiber | EirGenix vs. ABC Taiwan Electronics | EirGenix vs. Excellence Optoelectronic | EirGenix vs. Elan Microelectronics Corp |
| Acelon Chemicals vs. Taiwan Semiconductor Manufacturing | Acelon Chemicals vs. Hon Hai Precision | Acelon Chemicals vs. MediaTek | Acelon Chemicals vs. Chunghwa Telecom 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 Economic Indicators module to top statistical indicators that provide insights into how an economy is performing.
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