Correlation Between Generic Engineering and Amines Plasticizers

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

By analyzing existing cross correlation between Generic Engineering Construction and Amines Plasticizers Limited, you can compare the effects of market volatilities on Generic Engineering and Amines Plasticizers 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 Generic Engineering with a short position of Amines Plasticizers. Check out your portfolio center. Please also check ongoing floating volatility patterns of Generic Engineering and Amines Plasticizers.

Diversification Opportunities for Generic Engineering and Amines Plasticizers

0.82

Correlation Coefficient

Generic Engineering  Amines Plasticizers

Very poor diversification

The 3 months correlation between Generic and Amines is 0.82. Overlapping area represents the amount of risk that can be diversified away by holding Generic Engineering Constructi and Amines Plasticizers Limited in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Amines Plasticizers and Generic Engineering 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 Generic Engineering Construction are associated (or correlated) with Amines Plasticizers. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Amines Plasticizers has no effect on the direction of Generic Engineering i.e., Generic Engineering and Amines Plasticizers go up and down completely randomly.

Pair Corralation between Generic Engineering and Amines Plasticizers

Assuming the 90 days trading horizon Generic Engineering Construction is expected to generate 1.16 times more return on investment than Amines Plasticizers. However, Generic Engineering is 1.16 times more volatile than Amines Plasticizers Limited. It trades about -0.01 of its potential returns per unit of risk. Amines Plasticizers Limited is currently generating about -0.03 per unit of risk. If you would invest  5,090  in Generic Engineering Construction on April 22, 2025 and sell it today you would lose (1,135) from holding Generic Engineering Construction or give up 22.3% of portfolio value over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Strong
Accuracy	99.56%
Values	Daily Returns

Generic Engineering Constructi  vs.  Amines Plasticizers Limited

Generic Engineering

Risk-Adjusted Performance

Modest

Compared to the overall equity markets, risk-adjusted returns on investments in Generic Engineering Construction are ranked lower than 5 (%) of all global equities and portfolios over the last 90 days. Despite somewhat unfluctuating fundamental indicators, Generic Engineering sustained solid returns over the last few months and may actually be approaching a breakup point.

Amines Plasticizers

Risk-Adjusted Performance

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in Amines Plasticizers Limited are ranked lower than 2 (%) of all global equities and portfolios over the last 90 days. In spite of comparatively stable essential indicators, Amines Plasticizers is not utilizing all of its potentials. The recent stock price uproar, may contribute to short-horizon losses for the private investors.

Pair Trading with Generic Engineering and Amines Plasticizers

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

The idea behind Generic Engineering Construction and Amines Plasticizers Limited 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 Balance Of Power module to check stock momentum by analyzing Balance Of Power indicator and other technical ratios.