Correlation Between Bill Holdings and CeoTronics
Can any of the company-specific risk be diversified away by investing in both Bill Holdings and CeoTronics 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 Bill Holdings and CeoTronics into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Bill Holdings and CeoTronics AG, you can compare the effects of market volatilities on Bill Holdings and CeoTronics 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 Bill Holdings with a short position of CeoTronics. Check out your portfolio center. Please also check ongoing floating volatility patterns of Bill Holdings and CeoTronics.
Diversification Opportunities for Bill Holdings and CeoTronics
0.62 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Bill and CeoTronics is 0.62. Overlapping area represents the amount of risk that can be diversified away by holding Bill Holdings and CeoTronics AG in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on CeoTronics AG and Bill Holdings 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 Bill Holdings are associated (or correlated) with CeoTronics. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of CeoTronics AG has no effect on the direction of Bill Holdings i.e., Bill Holdings and CeoTronics go up and down completely randomly.
Pair Corralation between Bill Holdings and CeoTronics
Assuming the 90 days horizon Bill Holdings is expected to generate 4.2 times less return on investment than CeoTronics. But when comparing it to its historical volatility, Bill Holdings is 1.48 times less risky than CeoTronics. It trades about 0.08 of its potential returns per unit of risk. CeoTronics AG is currently generating about 0.23 of returns per unit of risk over similar time horizon. If you would invest 555.00 in CeoTronics AG on September 13, 2024 and sell it today you would earn a total of 105.00 from holding CeoTronics AG or generate 18.92% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 95.65% |
| Values | Daily Returns |
Bill Holdings vs. CeoTronics AG
Performance |
| Timeline |
| Bill Holdings |
| CeoTronics AG |
Bill Holdings and CeoTronics Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Bill Holdings and CeoTronics
The main advantage of trading using opposite Bill Holdings and CeoTronics positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Bill Holdings position performs unexpectedly, CeoTronics 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 CeoTronics will offset losses from the drop in CeoTronics' long position.| Bill Holdings vs. RCM TECHNOLOGIES | Bill Holdings vs. PennyMac Mortgage Investment | Bill Holdings vs. SEI INVESTMENTS | Bill Holdings vs. New Residential Investment |
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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 ETFs module to find actively traded Exchange Traded Funds (ETF) from around the world.
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