Correlation Between Commercial Metals and Celanese
Can any of the company-specific risk be diversified away by investing in both Commercial Metals and Celanese 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 Commercial Metals and Celanese into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Commercial Metals and Celanese, you can compare the effects of market volatilities on Commercial Metals and Celanese 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 Commercial Metals with a short position of Celanese. Check out your portfolio center. Please also check ongoing floating volatility patterns of Commercial Metals and Celanese.
Diversification Opportunities for Commercial Metals and Celanese
-0.8 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between Commercial and Celanese is -0.8. Overlapping area represents the amount of risk that can be diversified away by holding Commercial Metals and Celanese in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Celanese and Commercial Metals 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 Commercial Metals are associated (or correlated) with Celanese. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Celanese has no effect on the direction of Commercial Metals i.e., Commercial Metals and Celanese go up and down completely randomly.
Pair Corralation between Commercial Metals and Celanese
Considering the 90-day investment horizon Commercial Metals is expected to generate 0.55 times more return on investment than Celanese. However, Commercial Metals is 1.83 times less risky than Celanese. It trades about 0.19 of its potential returns per unit of risk. Celanese is currently generating about -0.39 per unit of risk. If you would invest 5,421 in Commercial Metals on August 31, 2024 and sell it today you would earn a total of 716.00 from holding Commercial Metals or generate 13.21% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Commercial Metals vs. Celanese
Performance |
| Timeline |
| Commercial Metals |
| Celanese |
Commercial Metals and Celanese Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Commercial Metals and Celanese
The main advantage of trading using opposite Commercial Metals and Celanese positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Commercial Metals position performs unexpectedly, Celanese 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 Celanese will offset losses from the drop in Celanese's long position.| Commercial Metals vs. Nucor Corp | Commercial Metals vs. Steel Dynamics | Commercial Metals vs. ArcelorMittal SA ADR | Commercial Metals vs. Gerdau SA ADR |
| 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 Top Crypto Exchanges module to search and analyze digital assets across top global cryptocurrency exchanges.
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