Correlation Between AdvanSix and Asahi Kasei
Can any of the company-specific risk be diversified away by investing in both AdvanSix and Asahi Kasei 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 AdvanSix and Asahi Kasei into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between AdvanSix and Asahi Kasei, you can compare the effects of market volatilities on AdvanSix and Asahi Kasei 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 AdvanSix with a short position of Asahi Kasei. Check out your portfolio center. Please also check ongoing floating volatility patterns of AdvanSix and Asahi Kasei.
Diversification Opportunities for AdvanSix and Asahi Kasei
0.05 | Correlation Coefficient |
Significant diversification
The 3 months correlation between AdvanSix and Asahi is 0.05. Overlapping area represents the amount of risk that can be diversified away by holding AdvanSix and Asahi Kasei in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Asahi Kasei and AdvanSix 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 AdvanSix are associated (or correlated) with Asahi Kasei. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Asahi Kasei has no effect on the direction of AdvanSix i.e., AdvanSix and Asahi Kasei go up and down completely randomly.
Pair Corralation between AdvanSix and Asahi Kasei
If you would invest 3,041 in AdvanSix on August 28, 2024 and sell it today you would earn a total of 150.00 from holding AdvanSix or generate 4.93% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 20.93% |
| Values | Daily Returns |
AdvanSix vs. Asahi Kasei
Performance |
| Timeline |
| AdvanSix |
| Asahi Kasei |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Good
AdvanSix and Asahi Kasei Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with AdvanSix and Asahi Kasei
The main advantage of trading using opposite AdvanSix and Asahi Kasei positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if AdvanSix position performs unexpectedly, Asahi Kasei 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 Asahi Kasei will offset losses from the drop in Asahi Kasei's long position.| AdvanSix vs. Methanex | AdvanSix vs. Lsb Industries | AdvanSix vs. Green Plains Renewable | AdvanSix vs. Tronox Holdings PLC |
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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 Bollinger Bands module to use Bollinger Bands indicator to analyze target price for a given investing horizon.
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