Correlation Between Celanese and Huntsman
Can any of the company-specific risk be diversified away by investing in both Celanese and Huntsman 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 Huntsman into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Celanese and Huntsman, you can compare the effects of market volatilities on Celanese and Huntsman 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 Huntsman. Check out your portfolio center. Please also check ongoing floating volatility patterns of Celanese and Huntsman.
Diversification Opportunities for Celanese and Huntsman
Very weak diversification
The 3 months correlation between Celanese and Huntsman is 0.59. Overlapping area represents the amount of risk that can be diversified away by holding Celanese and Huntsman in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Huntsman 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 Huntsman. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Huntsman has no effect on the direction of Celanese i.e., Celanese and Huntsman go up and down completely randomly.
Pair Corralation between Celanese and Huntsman
Allowing for the 90-day total investment horizon Celanese is expected to generate 1.14 times more return on investment than Huntsman. However, Celanese is 1.14 times more volatile than Huntsman. It trades about 0.03 of its potential returns per unit of risk. Huntsman is currently generating about -0.08 per unit of risk. If you would invest 15,419 in Celanese on February 3, 2024 and sell it today you would earn a total of 219.00 from holding Celanese or generate 1.42% return on investment over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Together |
Strength | Weak |
Accuracy | 100.0% |
Values | Daily Returns |
Celanese vs. Huntsman
Performance |
Timeline |
Celanese |
Huntsman |
Celanese and Huntsman Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with Celanese and Huntsman
The main advantage of trading using opposite Celanese and Huntsman positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Celanese position performs unexpectedly, Huntsman 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 Huntsman will offset losses from the drop in Huntsman's long position.Celanese vs. Tronox Holdings PLC | Celanese vs. Green Plains Renewable | Celanese vs. Lsb Industries | Celanese vs. Huntsman |
Huntsman vs. Green Plains Renewable | Huntsman vs. AdvanSix | Huntsman vs. Tronox Holdings PLC | Huntsman vs. Methanex |
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 Markets Map module to get a quick overview of global market snapshot using zoomable world map. Drill down to check world indexes.
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