Correlation Between Celanese and Collective Mining

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

By analyzing existing cross correlation between Celanese and Collective Mining, you can compare the effects of market volatilities on Celanese and Collective Mining 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 Celanese with a short position of Collective Mining. Check out your portfolio center. Please also check ongoing floating volatility patterns of Celanese and Collective Mining.

Diversification Opportunities for Celanese and Collective Mining

-0.6

Correlation Coefficient

Celanese  Collective Mining

Excellent diversification

The 3 months correlation between Celanese and Collective is -0.6. Overlapping area represents the amount of risk that can be diversified away by holding Celanese and Collective Mining in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Collective Mining and Celanese 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 Celanese are associated (or correlated) with Collective Mining. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Collective Mining has no effect on the direction of Celanese i.e., Celanese and Collective Mining go up and down completely randomly.

Pair Corralation between Celanese and Collective Mining

Allowing for the 90-day total investment horizon Celanese is expected to under-perform the Collective Mining. In addition to that, Celanese is 1.02 times more volatile than Collective Mining. It trades about -0.05 of its total potential returns per unit of risk. Collective Mining is currently generating about 0.32 per unit of volatility. If you would invest  410.00  in Collective Mining on December 29, 2024 and sell it today you would earn a total of  442.00  from holding Collective Mining or generate 107.8% return on investment over 90 days.

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

Celanese  vs.  Collective Mining

Celanese

Risk-Adjusted Performance

Very Weak

Over the last 90 days Celanese 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 technical and fundamental indicators remain rather sound which may send shares a bit higher in April 2025. The latest tumult may also be a sign of longer-term up-swing for the firm shareholders.

Collective Mining

Risk-Adjusted Performance

Solid

Compared to the overall equity markets, risk-adjusted returns on investments in Collective Mining are ranked lower than 25 (%) of all global equities and portfolios over the last 90 days. Despite quite conflicting basic indicators, Collective Mining disclosed solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Celanese and Collective Mining

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

The idea behind Celanese and Collective Mining 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.

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 Cryptocurrency Center module to build and monitor diversified portfolio of extremely risky digital assets and cryptocurrency.