Correlation Between Acelon Chemicals and Grand Fortune

Can any of the company-specific risk be diversified away by investing in both Acelon Chemicals and Grand Fortune 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 Grand Fortune 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 Grand Fortune Securities, you can compare the effects of market volatilities on Acelon Chemicals and Grand Fortune 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 Grand Fortune. Check out your portfolio center. Please also check ongoing floating volatility patterns of Acelon Chemicals and Grand Fortune.

Diversification Opportunities for Acelon Chemicals and Grand Fortune

-0.06

Correlation Coefficient

Acelon Chemicals  Grand Fortune

Good diversification

The 3 months correlation between Acelon and Grand is -0.06. Overlapping area represents the amount of risk that can be diversified away by holding Acelon Chemicals Fiber and Grand Fortune Securities in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Grand Fortune Securities 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 Grand Fortune. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Grand Fortune Securities has no effect on the direction of Acelon Chemicals i.e., Acelon Chemicals and Grand Fortune go up and down completely randomly.

Pair Corralation between Acelon Chemicals and Grand Fortune

Assuming the 90 days trading horizon Acelon Chemicals Fiber is expected to under-perform the Grand Fortune. In addition to that, Acelon Chemicals is 4.48 times more volatile than Grand Fortune Securities. It trades about -0.07 of its total potential returns per unit of risk. Grand Fortune Securities is currently generating about -0.3 per unit of volatility. If you would invest  1,290  in Grand Fortune Securities on September 19, 2024 and sell it today you would lose (60.00) from holding Grand Fortune Securities or give up 4.65% of portfolio value over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Insignificant
Accuracy	100.0%
Values	Daily Returns

Acelon Chemicals Fiber  vs.  Grand Fortune Securities

Acelon Chemicals Fiber

Risk-Adjusted Performance

0 of 100

Weak

Over the last 90 days Acelon Chemicals Fiber has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of fairly stable basic indicators, Acelon Chemicals is not utilizing all of its potentials. The latest stock price fuss, may contribute to near-short-term losses for the sophisticated investors.

Grand Fortune Securities

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Grand Fortune Securities has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of fairly stable basic indicators, Grand Fortune is not utilizing all of its potentials. The latest stock price fuss, may contribute to near-short-term losses for the sophisticated investors.

Pair Trading with Acelon Chemicals and Grand Fortune

The main advantage of trading using opposite Acelon Chemicals and Grand Fortune positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Acelon Chemicals position performs unexpectedly, Grand Fortune 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 Grand Fortune will offset losses from the drop in Grand Fortune's long position.

The idea behind Acelon Chemicals Fiber and Grand Fortune Securities pairs trading is to make the combined position market-neutral, meaning the overall market's direction will not affect its win or loss (or potential downside or upside). This can be achieved by designing a pairs trade with two highly correlated stocks or equities that operate in a similar space or sector, making it possible to obtain profits through simple and relatively low-risk investment.

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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 Commodity Channel module to use Commodity Channel Index to analyze current equity momentum.