Correlation Between Feng Tay and Acelon Chemicals
Can any of the company-specific risk be diversified away by investing in both Feng Tay 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 Feng Tay and Acelon Chemicals into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Feng Tay Enterprises and Acelon Chemicals Fiber, you can compare the effects of market volatilities on Feng Tay 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 Feng Tay with a short position of Acelon Chemicals. Check out your portfolio center. Please also check ongoing floating volatility patterns of Feng Tay and Acelon Chemicals.
Diversification Opportunities for Feng Tay and Acelon Chemicals
-0.31 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Feng and Acelon is -0.31. Overlapping area represents the amount of risk that can be diversified away by holding Feng Tay Enterprises 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 Feng Tay 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 Feng Tay Enterprises 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 Feng Tay i.e., Feng Tay and Acelon Chemicals go up and down completely randomly.
Pair Corralation between Feng Tay and Acelon Chemicals
Assuming the 90 days trading horizon Feng Tay Enterprises is expected to under-perform the Acelon Chemicals. But the stock apears to be less risky and, when comparing its historical volatility, Feng Tay Enterprises is 1.27 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 1,125 in Acelon Chemicals Fiber on September 12, 2024 and sell it today you would earn a total of 255.00 from holding Acelon Chemicals Fiber or generate 22.67% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Feng Tay Enterprises vs. Acelon Chemicals Fiber
Performance |
| Timeline |
| Feng Tay Enterprises |
| Acelon Chemicals Fiber |
Feng Tay and Acelon Chemicals Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Feng Tay and Acelon Chemicals
The main advantage of trading using opposite Feng Tay and Acelon Chemicals positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Feng Tay 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.| Feng Tay vs. Pou Chen Corp | Feng Tay vs. Eclat Textile Co | Feng Tay vs. Hotai Motor Co | Feng Tay vs. Giant Manufacturing Co |
| 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 Performance Analysis module to check effects of mean-variance optimization against your current asset allocation.
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