Correlation Between Suntory Beverage and CeoTronics
Can any of the company-specific risk be diversified away by investing in both Suntory Beverage 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 Suntory Beverage and CeoTronics into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Suntory Beverage Food and CeoTronics AG, you can compare the effects of market volatilities on Suntory Beverage 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 Suntory Beverage with a short position of CeoTronics. Check out your portfolio center. Please also check ongoing floating volatility patterns of Suntory Beverage and CeoTronics.
Diversification Opportunities for Suntory Beverage and CeoTronics
-0.31 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Suntory and CeoTronics is -0.31. Overlapping area represents the amount of risk that can be diversified away by holding Suntory Beverage Food and CeoTronics AG in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on CeoTronics AG and Suntory Beverage 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 Suntory Beverage Food 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 Suntory Beverage i.e., Suntory Beverage and CeoTronics go up and down completely randomly.
Pair Corralation between Suntory Beverage and CeoTronics
Assuming the 90 days horizon Suntory Beverage is expected to generate 4.5 times less return on investment than CeoTronics. But when comparing it to its historical volatility, Suntory Beverage Food is 1.73 times less risky than CeoTronics. It trades about 0.12 of its potential returns per unit of risk. CeoTronics AG is currently generating about 0.31 of returns per unit of risk over similar time horizon. If you would invest 521.00 in CeoTronics AG on September 1, 2024 and sell it today you would earn a total of 119.00 from holding CeoTronics AG or generate 22.84% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Suntory Beverage Food vs. CeoTronics AG
Performance |
| Timeline |
| Suntory Beverage Food |
| CeoTronics AG |
Suntory Beverage and CeoTronics Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Suntory Beverage and CeoTronics
The main advantage of trading using opposite Suntory Beverage and CeoTronics positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Suntory Beverage 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.| Suntory Beverage vs. Heineken Holding NV | Suntory Beverage vs. Superior Plus Corp | Suntory Beverage vs. NMI Holdings | Suntory Beverage vs. Origin Agritech |
| CeoTronics vs. Motorola Solutions | CeoTronics vs. Nokia | CeoTronics vs. ZTE Corporation | CeoTronics vs. Hewlett Packard Enterprise |
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 Portfolio Diagnostics module to use generated alerts and portfolio events aggregator to diagnose current holdings.
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