Correlation Between China Clean and Acme United
Can any of the company-specific risk be diversified away by investing in both China Clean and Acme United 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 China Clean and Acme United into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between China Clean Energy and Acme United, you can compare the effects of market volatilities on China Clean and Acme United 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 China Clean with a short position of Acme United. Check out your portfolio center. Please also check ongoing floating volatility patterns of China Clean and Acme United.
Diversification Opportunities for China Clean and Acme United
0.0 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between China and Acme is 0.0. Overlapping area represents the amount of risk that can be diversified away by holding China Clean Energy and Acme United in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Acme United and China Clean 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 China Clean Energy are associated (or correlated) with Acme United. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Acme United has no effect on the direction of China Clean i.e., China Clean and Acme United go up and down completely randomly.
Pair Corralation between China Clean and Acme United
If you would invest 2,286 in Acme United on September 2, 2024 and sell it today you would earn a total of 2,165 from holding Acme United or generate 94.71% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Flat |
| Strength | Insignificant |
| Accuracy | 99.8% |
| Values | Daily Returns |
China Clean Energy vs. Acme United
Performance |
| Timeline |
| China Clean Energy |
| Acme United |
China Clean and Acme United Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with China Clean and Acme United
The main advantage of trading using opposite China Clean and Acme United positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if China Clean position performs unexpectedly, Acme United 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 Acme United will offset losses from the drop in Acme United's long position.| China Clean vs. Sherwin Williams Co | China Clean vs. Air Liquide SA | China Clean vs. Air Products and | China Clean vs. Ecolab Inc |
| Acme United vs. Mannatech Incorporated | Acme United vs. European Wax Center | Acme United vs. Inter Parfums | Acme United vs. Spectrum Brands Holdings |
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 Companies Directory module to evaluate performance of over 100,000 Stocks, Funds, and ETFs against different fundamentals.
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