Correlation Between Information Technology and Acelon Chemicals
Can any of the company-specific risk be diversified away by investing in both Information Technology 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 Information Technology and Acelon Chemicals into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Information Technology Total and Acelon Chemicals Fiber, you can compare the effects of market volatilities on Information Technology 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 Information Technology with a short position of Acelon Chemicals. Check out your portfolio center. Please also check ongoing floating volatility patterns of Information Technology and Acelon Chemicals.
Diversification Opportunities for Information Technology and Acelon Chemicals
0.38 | Correlation Coefficient |
Weak diversification
The 3 months correlation between Information and Acelon is 0.38. Overlapping area represents the amount of risk that can be diversified away by holding Information Technology Total 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 Information Technology 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 Information Technology Total 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 Information Technology i.e., Information Technology and Acelon Chemicals go up and down completely randomly.
Pair Corralation between Information Technology and Acelon Chemicals
Assuming the 90 days trading horizon Information Technology Total is expected to under-perform the Acelon Chemicals. But the stock apears to be less risky and, when comparing its historical volatility, Information Technology Total is 1.17 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 0.04 of returns per unit of risk over similar time horizon. If you would invest 1,250 in Acelon Chemicals Fiber on September 3, 2024 and sell it today you would earn a total of 125.00 from holding Acelon Chemicals Fiber or generate 10.0% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Information Technology Total vs. Acelon Chemicals Fiber
Performance |
| Timeline |
| Information Technology |
| Acelon Chemicals Fiber |
Information Technology and Acelon Chemicals Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Information Technology and Acelon Chemicals
The main advantage of trading using opposite Information Technology and Acelon Chemicals positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Information Technology 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.| Information Technology vs. Digital China Holdings | Information Technology vs. Acer E Enabling Service | Information Technology vs. Sysage Technology Co | Information Technology vs. Green World Fintech |
| 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 Funds Screener module to find actively-traded funds from around the world traded on over 30 global exchanges.
Other Complementary Tools
| Technical Analysis Check basic technical indicators and analysis based on most latest market data | |
| Portfolio Backtesting Avoid under-diversification and over-optimization by backtesting your portfolios | |
| Equity Search Search for actively traded equities including funds and ETFs from over 30 global markets | |
| My Watchlist Analysis Analyze my current watchlist and to refresh optimization strategy. Macroaxis watchlist is based on self-learning algorithm to remember stocks you like | |
| Commodity Directory Find actively traded commodities issued by global exchanges |