Correlation Between Tungsten West and Accelleron Industries
Can any of the company-specific risk be diversified away by investing in both Tungsten West and Accelleron Industries 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 Tungsten West and Accelleron Industries into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Tungsten West PLC and Accelleron Industries AG, you can compare the effects of market volatilities on Tungsten West and Accelleron Industries 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 Tungsten West with a short position of Accelleron Industries. Check out your portfolio center. Please also check ongoing floating volatility patterns of Tungsten West and Accelleron Industries.
Diversification Opportunities for Tungsten West and Accelleron Industries
-0.66 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Tungsten and Accelleron is -0.66. Overlapping area represents the amount of risk that can be diversified away by holding Tungsten West PLC and Accelleron Industries AG in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Accelleron Industries and Tungsten West 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 Tungsten West PLC are associated (or correlated) with Accelleron Industries. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Accelleron Industries has no effect on the direction of Tungsten West i.e., Tungsten West and Accelleron Industries go up and down completely randomly.
Pair Corralation between Tungsten West and Accelleron Industries
Assuming the 90 days trading horizon Tungsten West is expected to generate 1.11 times less return on investment than Accelleron Industries. In addition to that, Tungsten West is 4.86 times more volatile than Accelleron Industries AG. It trades about 0.04 of its total potential returns per unit of risk. Accelleron Industries AG is currently generating about 0.19 per unit of volatility. If you would invest 4,377 in Accelleron Industries AG on August 30, 2024 and sell it today you would earn a total of 540.00 from holding Accelleron Industries AG or generate 12.34% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Tungsten West PLC vs. Accelleron Industries AG
Performance |
| Timeline |
| Tungsten West PLC |
| Accelleron Industries |
Tungsten West and Accelleron Industries Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Tungsten West and Accelleron Industries
The main advantage of trading using opposite Tungsten West and Accelleron Industries positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Tungsten West position performs unexpectedly, Accelleron Industries 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 Accelleron Industries will offset losses from the drop in Accelleron Industries' long position.| Tungsten West vs. Givaudan SA | Tungsten West vs. Antofagasta PLC | Tungsten West vs. Centamin PLC | Tungsten West vs. Atalaya Mining |
| Accelleron Industries vs. Tungsten West PLC | Accelleron Industries vs. Argo Group Limited | Accelleron Industries vs. Hardide PLC | Accelleron Industries vs. Versarien PLC |
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 Bonds Directory module to find actively traded corporate debentures issued by US companies.
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