Correlation Between Ascent Solar and China Changjiang
Can any of the company-specific risk be diversified away by investing in both Ascent Solar and China Changjiang 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 Ascent Solar and China Changjiang into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Ascent Solar Technologies, and China Changjiang Mining, you can compare the effects of market volatilities on Ascent Solar and China Changjiang 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 Ascent Solar with a short position of China Changjiang. Check out your portfolio center. Please also check ongoing floating volatility patterns of Ascent Solar and China Changjiang.
Diversification Opportunities for Ascent Solar and China Changjiang
0.59 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Ascent and China is 0.59. Overlapping area represents the amount of risk that can be diversified away by holding Ascent Solar Technologies, and China Changjiang Mining in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on China Changjiang Mining and Ascent Solar 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 Ascent Solar Technologies, are associated (or correlated) with China Changjiang. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of China Changjiang Mining has no effect on the direction of Ascent Solar i.e., Ascent Solar and China Changjiang go up and down completely randomly.
Pair Corralation between Ascent Solar and China Changjiang
Given the investment horizon of 90 days Ascent Solar Technologies, is expected to under-perform the China Changjiang. But the stock apears to be less risky and, when comparing its historical volatility, Ascent Solar Technologies, is 5.87 times less risky than China Changjiang. The stock trades about -0.14 of its potential returns per unit of risk. The China Changjiang Mining is currently generating about 0.07 of returns per unit of risk over similar time horizon. If you would invest 1.20 in China Changjiang Mining on December 1, 2024 and sell it today you would lose (1.17) from holding China Changjiang Mining or give up 97.5% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 99.0% |
| Values | Daily Returns |
Ascent Solar Technologies, vs. China Changjiang Mining
Performance |
| Timeline |
| Ascent Solar Technol |
| China Changjiang Mining |
Ascent Solar and China Changjiang Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Ascent Solar and China Changjiang
The main advantage of trading using opposite Ascent Solar and China Changjiang positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Ascent Solar position performs unexpectedly, China Changjiang 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 China Changjiang will offset losses from the drop in China Changjiang's long position.| Ascent Solar vs. Asure Software | Ascent Solar vs. Evertz Technologies Limited | Ascent Solar vs. ArcelorMittal SA ADR | Ascent Solar vs. Belden Inc |
| China Changjiang vs. Bassett Furniture Industries | China Changjiang vs. Kilroy Realty Corp | China Changjiang vs. Hudson Pacific Properties | China Changjiang vs. PennantPark Floating Rate |
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 Investing Opportunities module to build portfolios using our predefined set of ideas and optimize them against your investing preferences.
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