Correlation Between Ashland Global and Balchem
Can any of the company-specific risk be diversified away by investing in both Ashland Global and Balchem 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 Ashland Global and Balchem into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Ashland Global Holdings and Balchem, you can compare the effects of market volatilities on Ashland Global and Balchem 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 Ashland Global with a short position of Balchem. Check out your portfolio center. Please also check ongoing floating volatility patterns of Ashland Global and Balchem.
Diversification Opportunities for Ashland Global and Balchem
-0.44 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Ashland and Balchem is -0.44. Overlapping area represents the amount of risk that can be diversified away by holding Ashland Global Holdings and Balchem in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Balchem and Ashland Global 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 Ashland Global Holdings are associated (or correlated) with Balchem. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Balchem has no effect on the direction of Ashland Global i.e., Ashland Global and Balchem go up and down completely randomly.
Pair Corralation between Ashland Global and Balchem
Considering the 90-day investment horizon Ashland Global Holdings is expected to under-perform the Balchem. In addition to that, Ashland Global is 1.35 times more volatile than Balchem. It trades about -0.14 of its total potential returns per unit of risk. Balchem is currently generating about 0.2 per unit of volatility. If you would invest 17,079 in Balchem on August 27, 2024 and sell it today you would earn a total of 1,190 from holding Balchem or generate 6.97% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Ashland Global Holdings vs. Balchem
Performance |
| Timeline |
| Ashland Global Holdings |
| Balchem |
Ashland Global and Balchem Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Ashland Global and Balchem
The main advantage of trading using opposite Ashland Global and Balchem positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Ashland Global position performs unexpectedly, Balchem 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 Balchem will offset losses from the drop in Balchem's long position.| Ashland Global vs. H B Fuller | Ashland Global vs. Element Solutions | Ashland Global vs. Balchem | Ashland Global vs. Avantor |
| Balchem vs. Sensient Technologies | Balchem vs. Innospec | Balchem vs. Minerals Technologies | Balchem vs. Oil Dri |
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 Latest Portfolios module to quick portfolio dashboard that showcases your latest portfolios.
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