Correlation Between AdvanSix and NanoXplore
Can any of the company-specific risk be diversified away by investing in both AdvanSix and NanoXplore 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 NanoXplore into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between AdvanSix and NanoXplore, you can compare the effects of market volatilities on AdvanSix and NanoXplore 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 NanoXplore. Check out your portfolio center. Please also check ongoing floating volatility patterns of AdvanSix and NanoXplore.
Diversification Opportunities for AdvanSix and NanoXplore
0.18 | Correlation Coefficient |
Average diversification
The 3 months correlation between AdvanSix and NanoXplore is 0.18. Overlapping area represents the amount of risk that can be diversified away by holding AdvanSix and NanoXplore in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on NanoXplore 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 NanoXplore. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of NanoXplore has no effect on the direction of AdvanSix i.e., AdvanSix and NanoXplore go up and down completely randomly.
Pair Corralation between AdvanSix and NanoXplore
Given the investment horizon of 90 days AdvanSix is expected to generate 1.16 times more return on investment than NanoXplore. However, AdvanSix is 1.16 times more volatile than NanoXplore. It trades about 0.24 of its potential returns per unit of risk. NanoXplore is currently generating about -0.34 per unit of risk. If you would invest 2,886 in AdvanSix on August 27, 2024 and sell it today you would earn a total of 348.00 from holding AdvanSix or generate 12.06% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
AdvanSix vs. NanoXplore
Performance |
| Timeline |
| AdvanSix |
| NanoXplore |
AdvanSix and NanoXplore Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with AdvanSix and NanoXplore
The main advantage of trading using opposite AdvanSix and NanoXplore positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if AdvanSix position performs unexpectedly, NanoXplore 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 NanoXplore will offset losses from the drop in NanoXplore's long position.| AdvanSix vs. Methanex | AdvanSix vs. Lsb Industries | AdvanSix vs. Green Plains Renewable | AdvanSix vs. Tronox Holdings PLC |
| NanoXplore vs. Origin Materials | NanoXplore vs. BASF SE NA | NanoXplore vs. Braskem SA Class | NanoXplore vs. Lsb Industries |
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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