Correlation Between Acelon Chemicals and Century Wind
Can any of the company-specific risk be diversified away by investing in both Acelon Chemicals and Century Wind 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 Century Wind 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 Century Wind Power, you can compare the effects of market volatilities on Acelon Chemicals and Century Wind 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 Century Wind. Check out your portfolio center. Please also check ongoing floating volatility patterns of Acelon Chemicals and Century Wind.
Diversification Opportunities for Acelon Chemicals and Century Wind
0.47 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Acelon and Century is 0.47. Overlapping area represents the amount of risk that can be diversified away by holding Acelon Chemicals Fiber and Century Wind Power in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Century Wind Power 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 Century Wind. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Century Wind Power has no effect on the direction of Acelon Chemicals i.e., Acelon Chemicals and Century Wind go up and down completely randomly.
Pair Corralation between Acelon Chemicals and Century Wind
Assuming the 90 days trading horizon Acelon Chemicals Fiber is expected to generate 0.66 times more return on investment than Century Wind. However, Acelon Chemicals Fiber is 1.52 times less risky than Century Wind. It trades about -0.04 of its potential returns per unit of risk. Century Wind Power is currently generating about -0.05 per unit of risk. If you would invest 1,405 in Acelon Chemicals Fiber on December 5, 2024 and sell it today you would lose (65.00) from holding Acelon Chemicals Fiber or give up 4.63% of portfolio value over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Together |
Strength | Weak |
Accuracy | 100.0% |
Values | Daily Returns |
Acelon Chemicals Fiber vs. Century Wind Power
Performance |
Timeline |
Acelon Chemicals Fiber |
Century Wind Power |
Acelon Chemicals and Century Wind Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with Acelon Chemicals and Century Wind
The main advantage of trading using opposite Acelon Chemicals and Century Wind positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Acelon Chemicals position performs unexpectedly, Century Wind 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 Century Wind will offset losses from the drop in Century Wind'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 |
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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 Aroon Oscillator module to analyze current equity momentum using Aroon Oscillator and other momentum ratios.
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