Correlation Between CSS Industries and Acorn International

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Can any of the company-specific risk be diversified away by investing in both CSS Industries and Acorn International 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 CSS Industries and Acorn International into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between CSS Industries and Acorn International, you can compare the effects of market volatilities on CSS Industries and Acorn International 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 CSS Industries with a short position of Acorn International. Check out your portfolio center. Please also check ongoing floating volatility patterns of CSS Industries and Acorn International.

Diversification Opportunities for CSS Industries and Acorn International

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  Correlation Coefficient

Pay attention - limited upside

The 3 months correlation between CSS and Acorn is 0.0. Overlapping area represents the amount of risk that can be diversified away by holding CSS Industries and Acorn International in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Acorn International and CSS Industries 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 CSS Industries are associated (or correlated) with Acorn International. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Acorn International has no effect on the direction of CSS Industries i.e., CSS Industries and Acorn International go up and down completely randomly.

Pair Corralation between CSS Industries and Acorn International

If you would invest (100.00) in Acorn International on December 30, 2023 and sell it today you would earn a total of  100.00  from holding Acorn International or generate -100.0% return on investment over 90 days.
Time Period3 Months [change]
DirectionFlat 
StrengthInsignificant
Accuracy100.0%
ValuesDaily Returns

CSS Industries  vs.  Acorn International

 Performance 
       Timeline  
CSS Industries 

Risk-Adjusted Performance

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Over the last 90 days CSS Industries has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of comparatively stable basic indicators, CSS Industries is not utilizing all of its potentials. The recent stock price uproar, may contribute to short-horizon losses for the private investors.
Acorn International 

Risk-Adjusted Performance

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Low
 
High
Very Weak
Over the last 90 days Acorn International has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of fairly stable basic indicators, Acorn International is not utilizing all of its potentials. The latest stock price fuss, may contribute to near-short-term losses for the sophisticated investors.

CSS Industries and Acorn International Volatility Contrast

   Predicted Return Density   
       Returns  

Pair Trading with CSS Industries and Acorn International

The main advantage of trading using opposite CSS Industries and Acorn International positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if CSS Industries position performs unexpectedly, Acorn International 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 Acorn International will offset losses from the drop in Acorn International's long position.
The idea behind CSS Industries and Acorn International 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 ETF Categories module to list of ETF categories grouped based on various criteria, such as the investment strategy or type of investments.

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