Correlation Between Asia Carbon and Kronos Worldwide
Can any of the company-specific risk be diversified away by investing in both Asia Carbon and Kronos Worldwide 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 Kronos Worldwide 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 Kronos Worldwide, you can compare the effects of market volatilities on Asia Carbon and Kronos Worldwide 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 Kronos Worldwide. Check out your portfolio center. Please also check ongoing floating volatility patterns of Asia Carbon and Kronos Worldwide.
Diversification Opportunities for Asia Carbon and Kronos Worldwide
0.0 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between Asia and Kronos is 0.0. Overlapping area represents the amount of risk that can be diversified away by holding Asia Carbon Industries and Kronos Worldwide in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Kronos Worldwide 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 Kronos Worldwide. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Kronos Worldwide has no effect on the direction of Asia Carbon i.e., Asia Carbon and Kronos Worldwide go up and down completely randomly.
Pair Corralation between Asia Carbon and Kronos Worldwide
If you would invest 923.00 in Kronos Worldwide on September 12, 2024 and sell it today you would earn a total of 118.00 from holding Kronos Worldwide or generate 12.78% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Flat |
| Strength | Insignificant |
| Accuracy | 99.6% |
| Values | Daily Returns |
Asia Carbon Industries vs. Kronos Worldwide
Performance |
| Timeline |
| Asia Carbon Industries |
| Kronos Worldwide |
Asia Carbon and Kronos Worldwide Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Asia Carbon and Kronos Worldwide
The main advantage of trading using opposite Asia Carbon and Kronos Worldwide positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Asia Carbon position performs unexpectedly, Kronos Worldwide 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 Kronos Worldwide will offset losses from the drop in Kronos Worldwide's long position.| Asia Carbon vs. Chemours Co | Asia Carbon vs. International Flavors Fragrances | Asia Carbon vs. Air Products and | Asia Carbon vs. PPG Industries |
| Kronos Worldwide vs. Griffon | Kronos Worldwide vs. Merck Company | Kronos Worldwide vs. Brinker International | Kronos Worldwide vs. Alcoa 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 Equity Forecasting module to use basic forecasting models to generate price predictions and determine price momentum.
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