Correlation Between Cabot and Asia Carbon
Can any of the company-specific risk be diversified away by investing in both Cabot and Asia Carbon 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 Cabot and Asia Carbon into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Cabot and Asia Carbon Industries, you can compare the effects of market volatilities on Cabot and Asia Carbon 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 Cabot with a short position of Asia Carbon. Check out your portfolio center. Please also check ongoing floating volatility patterns of Cabot and Asia Carbon.
Diversification Opportunities for Cabot and Asia Carbon
0.0 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between Cabot and Asia is 0.0. Overlapping area represents the amount of risk that can be diversified away by holding Cabot and Asia Carbon Industries in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Asia Carbon Industries and Cabot 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 Cabot are associated (or correlated) with Asia Carbon. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Asia Carbon Industries has no effect on the direction of Cabot i.e., Cabot and Asia Carbon go up and down completely randomly.
Pair Corralation between Cabot and Asia Carbon
If you would invest 8,116 in Cabot on September 12, 2024 and sell it today you would earn a total of 2,385 from holding Cabot or generate 29.39% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Flat |
| Strength | Insignificant |
| Accuracy | 99.6% |
| Values | Daily Returns |
Cabot vs. Asia Carbon Industries
Performance |
| Timeline |
| Cabot |
| Asia Carbon Industries |
Cabot and Asia Carbon Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Cabot and Asia Carbon
The main advantage of trading using opposite Cabot and Asia Carbon positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Cabot position performs unexpectedly, Asia Carbon 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 Asia Carbon will offset losses from the drop in Asia Carbon's long position.The idea behind Cabot and Asia Carbon Industries pairs trading is to make the combined position market-neutral, meaning the overall market's direction will not affect its win or loss (or potential downside or upside). This can be achieved by designing a pairs trade with two highly correlated stocks or equities that operate in a similar space or sector, making it possible to obtain profits through simple and relatively low-risk investment.| Asia Carbon vs. Chemours Co | Asia Carbon vs. International Flavors Fragrances | Asia Carbon vs. Air Products and | Asia Carbon vs. PPG 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 Portfolio Comparator module to compare the composition, asset allocations and performance of any two portfolios in your account.
Other Complementary Tools
| Idea Analyzer Analyze all characteristics, volatility and risk-adjusted return of Macroaxis ideas | |
| Balance Of Power Check stock momentum by analyzing Balance Of Power indicator and other technical ratios | |
| Idea Optimizer Use advanced portfolio builder with pre-computed micro ideas to build optimal portfolio | |
| Content Syndication Quickly integrate customizable finance content to your own investment portal | |
| Instant Ratings Determine any equity ratings based on digital recommendations. Macroaxis instant equity ratings are based on combination of fundamental analysis and risk-adjusted market performance |