Correlation Between Acelon Chemicals and China Construction
Can any of the company-specific risk be diversified away by investing in both Acelon Chemicals and China Construction 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 Acelon Chemicals and China Construction into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Acelon Chemicals Fiber and China Construction Bank, you can compare the effects of market volatilities on Acelon Chemicals and China Construction 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 Acelon Chemicals with a short position of China Construction. Check out your portfolio center. Please also check ongoing floating volatility patterns of Acelon Chemicals and China Construction.
Diversification Opportunities for Acelon Chemicals and China Construction
0.28 | Correlation Coefficient |
Modest diversification
The 3 months correlation between Acelon and China is 0.28. Overlapping area represents the amount of risk that can be diversified away by holding Acelon Chemicals Fiber and China Construction Bank in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on China Construction Bank and Acelon Chemicals 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 Acelon Chemicals Fiber are associated (or correlated) with China Construction. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of China Construction Bank has no effect on the direction of Acelon Chemicals i.e., Acelon Chemicals and China Construction go up and down completely randomly.
Pair Corralation between Acelon Chemicals and China Construction
Assuming the 90 days trading horizon Acelon Chemicals Fiber is expected to generate 5.4 times more return on investment than China Construction. However, Acelon Chemicals is 5.4 times more volatile than China Construction Bank. It trades about 0.21 of its potential returns per unit of risk. China Construction Bank is currently generating about 0.02 per unit of risk. If you would invest 1,195 in Acelon Chemicals Fiber on December 28, 2024 and sell it today you would earn a total of 490.00 from holding Acelon Chemicals Fiber or generate 41.0% return on investment over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Together |
Strength | Very Weak |
Accuracy | 98.21% |
Values | Daily Returns |
Acelon Chemicals Fiber vs. China Construction Bank
Performance |
Timeline |
Acelon Chemicals Fiber |
China Construction Bank |
Acelon Chemicals and China Construction Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with Acelon Chemicals and China Construction
The main advantage of trading using opposite Acelon Chemicals and China Construction positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Acelon Chemicals position performs unexpectedly, China Construction 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 China Construction will offset losses from the drop in China Construction's long position.Acelon Chemicals vs. Honmyue Enterprise Co | Acelon Chemicals vs. Tainan Spinning Co | Acelon Chemicals vs. Chia Her Industrial | Acelon Chemicals vs. Zig Sheng Industrial |
China Construction vs. CTBC Financial Holding | China Construction vs. Mega Financial Holding | China Construction vs. Shan Loong Transportation Co | China Construction vs. Chinese Maritime Transport |
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 Idea Analyzer module to analyze all characteristics, volatility and risk-adjusted return of Macroaxis ideas.
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