Correlation Between Crown Asia and Global Ferronickel

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

By analyzing existing cross correlation between Crown Asia Chemicals and Global Ferronickel Holdings, you can compare the effects of market volatilities on Crown Asia and Global Ferronickel 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 Crown Asia with a short position of Global Ferronickel. Check out your portfolio center. Please also check ongoing floating volatility patterns of Crown Asia and Global Ferronickel.

Diversification Opportunities for Crown Asia and Global Ferronickel

0.13

Correlation Coefficient

Crown Asia  Global Ferronickel

Average diversification

The 3 months correlation between Crown and Global is 0.13. Overlapping area represents the amount of risk that can be diversified away by holding Crown Asia Chemicals and Global Ferronickel Holdings in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Global Ferronickel and Crown Asia 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 Crown Asia Chemicals are associated (or correlated) with Global Ferronickel. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Global Ferronickel has no effect on the direction of Crown Asia i.e., Crown Asia and Global Ferronickel go up and down completely randomly.

Pair Corralation between Crown Asia and Global Ferronickel

Assuming the 90 days trading horizon Crown Asia is expected to generate 7.37 times less return on investment than Global Ferronickel. But when comparing it to its historical volatility, Crown Asia Chemicals is 2.49 times less risky than Global Ferronickel. It trades about 0.02 of its potential returns per unit of risk. Global Ferronickel Holdings is currently generating about 0.06 of returns per unit of risk over similar time horizon. If you would invest  99.00  in Global Ferronickel Holdings on April 9, 2025 and sell it today you would earn a total of  24.00  from holding Global Ferronickel Holdings or generate 24.24% return on investment over 90 days.

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

Crown Asia Chemicals  vs.  Global Ferronickel Holdings

Crown Asia Chemicals

Risk-Adjusted Performance

Very Weak

Over the last 90 days Crown Asia Chemicals has generated negative risk-adjusted returns adding no value to investors with long positions. Even with relatively invariable basic indicators, Crown Asia is not utilizing all of its potentials. The newest stock price agitation, may contribute to short-term losses for the retail investors.

Global Ferronickel

Risk-Adjusted Performance

Modest

Compared to the overall equity markets, risk-adjusted returns on investments in Global Ferronickel Holdings are ranked lower than 5 (%) of all global equities and portfolios over the last 90 days. In spite of rather weak technical and fundamental indicators, Global Ferronickel exhibited solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Crown Asia and Global Ferronickel

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

The idea behind Crown Asia Chemicals and Global Ferronickel Holdings 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 Crypto Correlations module to use cryptocurrency correlation module to diversify your cryptocurrency portfolio across multiple coins.