Correlation Between Celanese and E I
Can any of the company-specific risk be diversified away by investing in both Celanese and E I 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 Celanese and E I into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Celanese and E I du, you can compare the effects of market volatilities on Celanese and E I 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 Celanese with a short position of E I. Check out your portfolio center. Please also check ongoing floating volatility patterns of Celanese and E I.
Diversification Opportunities for Celanese and E I
Weak diversification
The 3 months correlation between Celanese and CTA-PA is 0.37. Overlapping area represents the amount of risk that can be diversified away by holding Celanese and E I du in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on E I du and Celanese 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 Celanese are associated (or correlated) with E I. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of E I du has no effect on the direction of Celanese i.e., Celanese and E I go up and down completely randomly.
Pair Corralation between Celanese and E I
Allowing for the 90-day total investment horizon Celanese is expected to under-perform the E I. In addition to that, Celanese is 1.71 times more volatile than E I du. It trades about -0.03 of its total potential returns per unit of risk. E I du is currently generating about 0.01 per unit of volatility. If you would invest 5,788 in E I du on November 19, 2024 and sell it today you would earn a total of 14.00 from holding E I du or generate 0.24% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 93.95% |
| Values | Daily Returns |
Celanese vs. E I du
Performance |
| Timeline |
| Celanese |
| E I du |
Celanese and E I Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Celanese and E I
The main advantage of trading using opposite Celanese and E I positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Celanese position performs unexpectedly, E I 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 E I will offset losses from the drop in E I's long position.| Celanese vs. Tronox Holdings PLC | Celanese vs. Green Plains Renewable | Celanese vs. Lsb Industries | Celanese vs. Valhi Inc |
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 Bond Analysis module to evaluate and analyze corporate bonds as a potential investment for your portfolios..
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