Correlation Between Celanese and Green Plains
Can any of the company-specific risk be diversified away by investing in both Celanese and Green Plains 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 Green Plains into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Celanese and Green Plains Renewable, you can compare the effects of market volatilities on Celanese and Green Plains 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 Green Plains. Check out your portfolio center. Please also check ongoing floating volatility patterns of Celanese and Green Plains.
Diversification Opportunities for Celanese and Green Plains
0.61 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Celanese and Green is 0.61. Overlapping area represents the amount of risk that can be diversified away by holding Celanese and Green Plains Renewable in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Green Plains Renewable 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 Green Plains. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Green Plains Renewable has no effect on the direction of Celanese i.e., Celanese and Green Plains go up and down completely randomly.
Pair Corralation between Celanese and Green Plains
Allowing for the 90-day total investment horizon Celanese is expected to under-perform the Green Plains. In addition to that, Celanese is 1.3 times more volatile than Green Plains Renewable. It trades about -0.38 of its total potential returns per unit of risk. Green Plains Renewable is currently generating about -0.03 per unit of volatility. If you would invest 1,167 in Green Plains Renewable on August 23, 2024 and sell it today you would lose (58.00) from holding Green Plains Renewable or give up 4.97% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Celanese vs. Green Plains Renewable
Performance |
| Timeline |
| Celanese |
| Green Plains Renewable |
Celanese and Green Plains Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Celanese and Green Plains
The main advantage of trading using opposite Celanese and Green Plains positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Celanese position performs unexpectedly, Green Plains 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 Green Plains will offset losses from the drop in Green Plains' long position.| Celanese vs. Tronox Holdings PLC | Celanese vs. Green Plains Renewable | Celanese vs. Lsb Industries | Celanese vs. Valhi Inc |
| Green Plains vs. Lsb Industries | Green Plains vs. AdvanSix | Green Plains vs. Tronox Holdings PLC | Green Plains vs. Methanex |
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 Fundamental Analysis module to view fundamental data based on most recent published financial statements.
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