Correlation Between Asia Carbon and Givaudan

Can any of the company-specific risk be diversified away by investing in both Asia Carbon and Givaudan 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 Asia Carbon and Givaudan into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between Asia Carbon Industries and Givaudan SA ADR, you can compare the effects of market volatilities on Asia Carbon and Givaudan 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 Asia Carbon with a short position of Givaudan. Check out your portfolio center. Please also check ongoing floating volatility patterns of Asia Carbon and Givaudan.

Diversification Opportunities for Asia Carbon and Givaudan

0.0

Correlation Coefficient

Asia Carbon  Givaudan

Pay attention - limited upside

The 3 months correlation between Asia and Givaudan is 0.0. Overlapping area represents the amount of risk that can be diversified away by holding Asia Carbon Industries and Givaudan SA ADR in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Givaudan SA ADR and Asia Carbon 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 Asia Carbon Industries are associated (or correlated) with Givaudan. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Givaudan SA ADR has no effect on the direction of Asia Carbon i.e., Asia Carbon and Givaudan go up and down completely randomly.

Pair Corralation between Asia Carbon and Givaudan

If you would invest  0.01  in Asia Carbon Industries on September 12, 2024 and sell it today you would earn a total of  0.00  from holding Asia Carbon Industries or generate 0.0% return on investment over 90 days.

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

Asia Carbon Industries  vs.  Givaudan SA ADR

Asia Carbon Industries

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Asia Carbon Industries has generated negative risk-adjusted returns adding no value to investors with long positions. Despite somewhat strong basic indicators, Asia Carbon is not utilizing all of its potentials. The latest stock price disturbance, may contribute to short-term losses for the investors.

Givaudan SA ADR

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Givaudan SA ADR has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of weak performance in the last few months, the Stock's basic indicators remain fairly strong which may send shares a bit higher in January 2025. The current disturbance may also be a sign of long term up-swing for the company investors.

Pair Trading with Asia Carbon and Givaudan

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

The idea behind Asia Carbon Industries and Givaudan SA ADR 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 Sync Your Broker module to sync your existing holdings, watchlists, positions or portfolios from thousands of online brokerage services, banks, investment account aggregators and robo-advisors..