Correlation Between Pou Chen and Acelon Chemicals
Can any of the company-specific risk be diversified away by investing in both Pou Chen and Acelon Chemicals 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 Pou Chen and Acelon Chemicals into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Pou Chen Corp and Acelon Chemicals Fiber, you can compare the effects of market volatilities on Pou Chen and Acelon Chemicals 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 Pou Chen with a short position of Acelon Chemicals. Check out your portfolio center. Please also check ongoing floating volatility patterns of Pou Chen and Acelon Chemicals.
Diversification Opportunities for Pou Chen and Acelon Chemicals
0.42 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Pou and Acelon is 0.42. Overlapping area represents the amount of risk that can be diversified away by holding Pou Chen Corp and Acelon Chemicals Fiber in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Acelon Chemicals Fiber and Pou Chen 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 Pou Chen Corp are associated (or correlated) with Acelon Chemicals. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Acelon Chemicals Fiber has no effect on the direction of Pou Chen i.e., Pou Chen and Acelon Chemicals go up and down completely randomly.
Pair Corralation between Pou Chen and Acelon Chemicals
Assuming the 90 days trading horizon Pou Chen Corp is expected to generate 0.61 times more return on investment than Acelon Chemicals. However, Pou Chen Corp is 1.64 times less risky than Acelon Chemicals. It trades about 0.07 of its potential returns per unit of risk. Acelon Chemicals Fiber is currently generating about -0.04 per unit of risk. If you would invest 3,740 in Pou Chen Corp on September 25, 2024 and sell it today you would earn a total of 205.00 from holding Pou Chen Corp or generate 5.48% return on investment over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Together |
Strength | Weak |
Accuracy | 100.0% |
Values | Daily Returns |
Pou Chen Corp vs. Acelon Chemicals Fiber
Performance |
Timeline |
Pou Chen Corp |
Acelon Chemicals Fiber |
Pou Chen and Acelon Chemicals Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with Pou Chen and Acelon Chemicals
The main advantage of trading using opposite Pou Chen and Acelon Chemicals positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Pou Chen position performs unexpectedly, Acelon Chemicals 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 Acelon Chemicals will offset losses from the drop in Acelon Chemicals' long position.Pou Chen vs. Merida Industry Co | Pou Chen vs. Cheng Shin Rubber | Pou Chen vs. Uni President Enterprises Corp |
Acelon Chemicals vs. Merida Industry Co | Acelon Chemicals vs. Cheng Shin Rubber | Acelon Chemicals vs. Uni President Enterprises Corp | Acelon Chemicals vs. Pou Chen Corp |
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 Global Correlations module to find global opportunities by holding instruments from different markets.
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