Correlation Between Crown LNG and Albemarle
Can any of the company-specific risk be diversified away by investing in both Crown LNG and Albemarle 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 Crown LNG and Albemarle into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Crown LNG Holdings and Albemarle, you can compare the effects of market volatilities on Crown LNG and Albemarle 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 Crown LNG with a short position of Albemarle. Check out your portfolio center. Please also check ongoing floating volatility patterns of Crown LNG and Albemarle.
Diversification Opportunities for Crown LNG and Albemarle
Very weak diversification
The 3 months correlation between Crown and Albemarle is 0.59. Overlapping area represents the amount of risk that can be diversified away by holding Crown LNG Holdings and Albemarle in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Albemarle and Crown LNG 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 Crown LNG Holdings are associated (or correlated) with Albemarle. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Albemarle has no effect on the direction of Crown LNG i.e., Crown LNG and Albemarle go up and down completely randomly.
Pair Corralation between Crown LNG and Albemarle
Assuming the 90 days horizon Crown LNG Holdings is expected to generate 13.21 times more return on investment than Albemarle. However, Crown LNG is 13.21 times more volatile than Albemarle. It trades about 0.1 of its potential returns per unit of risk. Albemarle is currently generating about 0.01 per unit of risk. If you would invest 3.75 in Crown LNG Holdings on August 31, 2024 and sell it today you would lose (1.43) from holding Crown LNG Holdings or give up 38.13% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 54.79% |
| Values | Daily Returns |
Crown LNG Holdings vs. Albemarle
Performance |
| Timeline |
| Crown LNG Holdings |
| Albemarle |
Crown LNG and Albemarle Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Crown LNG and Albemarle
The main advantage of trading using opposite Crown LNG and Albemarle positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Crown LNG position performs unexpectedly, Albemarle 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 Albemarle will offset losses from the drop in Albemarle's long position.| Crown LNG vs. Eni SpA ADR | Crown LNG vs. BP PLC ADR | Crown LNG vs. Ecopetrol SA ADR | Crown LNG vs. Suncor Energy |
| Albemarle vs. National Beverage Corp | Albemarle vs. Skechers USA | Albemarle vs. Ralph Lauren Corp | Albemarle vs. Molson Coors Brewing |
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 Portfolio Anywhere module to track or share privately all of your investments from the convenience of any device.
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