Correlation Between Celanese and Lavoro Limited
Can any of the company-specific risk be diversified away by investing in both Celanese and Lavoro Limited 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 Lavoro Limited into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Celanese and Lavoro Limited Class, you can compare the effects of market volatilities on Celanese and Lavoro Limited 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 Lavoro Limited. Check out your portfolio center. Please also check ongoing floating volatility patterns of Celanese and Lavoro Limited.
Diversification Opportunities for Celanese and Lavoro Limited
0.06 | Correlation Coefficient |
Significant diversification
The 3 months correlation between Celanese and Lavoro is 0.06. Overlapping area represents the amount of risk that can be diversified away by holding Celanese and Lavoro Limited Class in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Lavoro Limited Class 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 Lavoro Limited. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Lavoro Limited Class has no effect on the direction of Celanese i.e., Celanese and Lavoro Limited go up and down completely randomly.
Pair Corralation between Celanese and Lavoro Limited
Allowing for the 90-day total investment horizon Celanese is expected to generate 0.29 times more return on investment than Lavoro Limited. However, Celanese is 3.39 times less risky than Lavoro Limited. It trades about 0.1 of its potential returns per unit of risk. Lavoro Limited Class is currently generating about 0.02 per unit of risk. If you would invest 6,842 in Celanese on November 3, 2024 and sell it today you would earn a total of 262.00 from holding Celanese or generate 3.83% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Celanese vs. Lavoro Limited Class
Performance |
| Timeline |
| Celanese |
| Lavoro Limited Class |
Celanese and Lavoro Limited Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Celanese and Lavoro Limited
The main advantage of trading using opposite Celanese and Lavoro Limited positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Celanese position performs unexpectedly, Lavoro Limited 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 Lavoro Limited will offset losses from the drop in Lavoro Limited's long position.| Celanese vs. Tronox Holdings PLC | Celanese vs. Green Plains Renewable | Celanese vs. Lsb Industries | Celanese vs. Valhi Inc |
| Lavoro Limited vs. HF Sinclair Corp | Lavoro Limited vs. Finnair Oyj | Lavoro Limited vs. Fair Isaac | Lavoro Limited vs. Wizz Air 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 Theme Ratings module to determine theme ratings based on digital equity recommendations. Macroaxis theme ratings are based on combination of fundamental analysis and risk-adjusted market performance.
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