Correlation Between Asia Carbon and Arkema SA
Can any of the company-specific risk be diversified away by investing in both Asia Carbon and Arkema SA 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 Asia Carbon and Arkema SA into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Asia Carbon Industries and Arkema SA ADR, you can compare the effects of market volatilities on Asia Carbon and Arkema SA 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 Asia Carbon with a short position of Arkema SA. Check out your portfolio center. Please also check ongoing floating volatility patterns of Asia Carbon and Arkema SA.
Diversification Opportunities for Asia Carbon and Arkema SA
0.0 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between Asia and Arkema is 0.0. Overlapping area represents the amount of risk that can be diversified away by holding Asia Carbon Industries and Arkema SA ADR in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Arkema SA ADR and Asia Carbon 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 Asia Carbon Industries are associated (or correlated) with Arkema SA. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Arkema SA ADR has no effect on the direction of Asia Carbon i.e., Asia Carbon and Arkema SA go up and down completely randomly.
Pair Corralation between Asia Carbon and Arkema SA
If you would invest 8,331 in Arkema SA ADR on August 24, 2024 and sell it today you would lose (539.00) from holding Arkema SA ADR or give up 6.47% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Flat |
| Strength | Insignificant |
| Accuracy | 99.8% |
| Values | Daily Returns |
Asia Carbon Industries vs. Arkema SA ADR
Performance |
| Timeline |
| Asia Carbon Industries |
| Arkema SA ADR |
Asia Carbon and Arkema SA Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Asia Carbon and Arkema SA
The main advantage of trading using opposite Asia Carbon and Arkema SA positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Asia Carbon position performs unexpectedly, Arkema SA 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 Arkema SA will offset losses from the drop in Arkema SA's long position.| Asia Carbon vs. First Graphene | Asia Carbon vs. HUMANA INC | Asia Carbon vs. Aquagold International | Asia Carbon vs. Barloworld Ltd ADR |
| Arkema SA vs. First Graphene | Arkema SA vs. HUMANA INC | Arkema SA vs. Aquagold International | Arkema SA vs. Barloworld Ltd ADR |
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 Transaction History module to view history of all your transactions and understand their impact on performance.
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