Correlation Between Allied Circuit and Acelon Chemicals
Can any of the company-specific risk be diversified away by investing in both Allied Circuit 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 Allied Circuit and Acelon Chemicals into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Allied Circuit Co and Acelon Chemicals Fiber, you can compare the effects of market volatilities on Allied Circuit 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 Allied Circuit with a short position of Acelon Chemicals. Check out your portfolio center. Please also check ongoing floating volatility patterns of Allied Circuit and Acelon Chemicals.
Diversification Opportunities for Allied Circuit and Acelon Chemicals
-0.27 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Allied and Acelon is -0.27. Overlapping area represents the amount of risk that can be diversified away by holding Allied Circuit Co 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 Allied Circuit 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 Allied Circuit Co 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 Allied Circuit i.e., Allied Circuit and Acelon Chemicals go up and down completely randomly.
Pair Corralation between Allied Circuit and Acelon Chemicals
Assuming the 90 days trading horizon Allied Circuit Co is expected to under-perform the Acelon Chemicals. In addition to that, Allied Circuit is 1.1 times more volatile than Acelon Chemicals Fiber. It trades about -0.03 of its total potential returns per unit of risk. Acelon Chemicals Fiber is currently generating about 0.01 per unit of volatility. If you would invest 1,355 in Acelon Chemicals Fiber on September 12, 2024 and sell it today you would earn a total of 25.00 from holding Acelon Chemicals Fiber or generate 1.85% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 99.59% |
| Values | Daily Returns |
Allied Circuit Co vs. Acelon Chemicals Fiber
Performance |
| Timeline |
| Allied Circuit |
| Acelon Chemicals Fiber |
Allied Circuit and Acelon Chemicals Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Allied Circuit and Acelon Chemicals
The main advantage of trading using opposite Allied Circuit and Acelon Chemicals positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Allied Circuit 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.| Allied Circuit vs. Acelon Chemicals Fiber | Allied Circuit vs. China Metal Products | Allied Circuit vs. Mechema Chemicals Int | Allied Circuit vs. Namchow Chemical Industrial |
| Acelon Chemicals vs. Feng Tay Enterprises | Acelon Chemicals vs. Ruentex Development Co | 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 Risk-Return Analysis module to view associations between returns expected from investment and the risk you assume.
Other Complementary Tools
| Premium Stories Follow Macroaxis premium stories from verified contributors across different equity types, categories and coverage scope | |
| Pattern Recognition Use different Pattern Recognition models to time the market across multiple global exchanges | |
| Efficient Frontier Plot and analyze your portfolio and positions against risk-return landscape of the market. | |
| Portfolio Holdings Check your current holdings and cash postion to detemine if your portfolio needs rebalancing | |
| Alpha Finder Use alpha and beta coefficients to find investment opportunities after accounting for the risk |