Correlation Between Celanese and Central Valley

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

By analyzing existing cross correlation between Celanese and Central Valley Community, you can compare the effects of market volatilities on Celanese and Central Valley 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 Central Valley. Check out your portfolio center. Please also check ongoing floating volatility patterns of Celanese and Central Valley.

Diversification Opportunities for Celanese and Central Valley

-0.14

Correlation Coefficient

Celanese  Central Valley

Good diversification

The 3 months correlation between Celanese and Central is -0.14. Overlapping area represents the amount of risk that can be diversified away by holding Celanese and Central Valley Community in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Central Valley Community 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 Central Valley. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Central Valley Community has no effect on the direction of Celanese i.e., Celanese and Central Valley go up and down completely randomly.

Pair Corralation between Celanese and Central Valley

If you would invest  1,989  in Central Valley Community on March 2, 2024 and sell it today you would earn a total of  0.00  from holding Central Valley Community or generate 0.0% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Insignificant
Accuracy	4.76%
Values	Daily Returns

Celanese  vs.  Central Valley Community

Celanese

Risk-Adjusted Performance

0 of 100

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 rather sound technical and fundamental indicators, Celanese is not utilizing all of its potentials. The latest stock price tumult, may contribute to shorter-term losses for the shareholders.

Central Valley Community

Risk-Adjusted Performance

0 of 100

Solid

Over the last 90 days Central Valley Community has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of fairly unsteady fundamental indicators, Central Valley showed solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Celanese and Central Valley

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

The idea behind Celanese and Central Valley Community 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 Economic Indicators module to top statistical indicators that provide insights into how an economy is performing.