Correlation Between Celanese and NanoXplore
Can any of the company-specific risk be diversified away by investing in both Celanese and NanoXplore 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 NanoXplore into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Celanese and NanoXplore, you can compare the effects of market volatilities on Celanese and NanoXplore 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 NanoXplore. Check out your portfolio center. Please also check ongoing floating volatility patterns of Celanese and NanoXplore.
Diversification Opportunities for Celanese and NanoXplore
0.52 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Celanese and NanoXplore is 0.52. Overlapping area represents the amount of risk that can be diversified away by holding Celanese and NanoXplore in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on NanoXplore 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 NanoXplore. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of NanoXplore has no effect on the direction of Celanese i.e., Celanese and NanoXplore go up and down completely randomly.
Pair Corralation between Celanese and NanoXplore
Allowing for the 90-day total investment horizon Celanese is expected to generate 0.75 times more return on investment than NanoXplore. However, Celanese is 1.33 times less risky than NanoXplore. It trades about 0.1 of its potential returns per unit of risk. NanoXplore is currently generating about -0.07 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 | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Celanese vs. NanoXplore
Performance |
| Timeline |
| Celanese |
| NanoXplore |
Celanese and NanoXplore Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Celanese and NanoXplore
The main advantage of trading using opposite Celanese and NanoXplore positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Celanese position performs unexpectedly, NanoXplore 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 NanoXplore will offset losses from the drop in NanoXplore's long position.| Celanese vs. Tronox Holdings PLC | Celanese vs. Green Plains Renewable | Celanese vs. Lsb Industries | Celanese vs. Valhi Inc |
| NanoXplore vs. Altech Batteries Limited | NanoXplore vs. Asahi Kaisei Corp | NanoXplore vs. ASP Isotopes Common | NanoXplore vs. First Graphene |
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 Correlation Analysis module to reduce portfolio risk simply by holding instruments which are not perfectly correlated.
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