Correlation Between Alpha and CEVA
Can any of the company-specific risk be diversified away by investing in both Alpha and CEVA 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 Alpha and CEVA into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Alpha and Omega and CEVA Inc, you can compare the effects of market volatilities on Alpha and CEVA 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 Alpha with a short position of CEVA. Check out your portfolio center. Please also check ongoing floating volatility patterns of Alpha and CEVA.
Diversification Opportunities for Alpha and CEVA
Excellent diversification
The 3 months correlation between Alpha and CEVA is -0.51. Overlapping area represents the amount of risk that can be diversified away by holding Alpha and Omega and CEVA Inc in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on CEVA Inc and Alpha 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 Alpha and Omega are associated (or correlated) with CEVA. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of CEVA Inc has no effect on the direction of Alpha i.e., Alpha and CEVA go up and down completely randomly.
Pair Corralation between Alpha and CEVA
Given the investment horizon of 90 days Alpha and Omega is expected to generate 2.26 times more return on investment than CEVA. However, Alpha is 2.26 times more volatile than CEVA Inc. It trades about 0.1 of its potential returns per unit of risk. CEVA Inc is currently generating about 0.22 per unit of risk. If you would invest 3,543 in Alpha and Omega on August 24, 2024 and sell it today you would earn a total of 497.00 from holding Alpha and Omega or generate 14.03% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Alpha and Omega vs. CEVA Inc
Performance |
| Timeline |
| Alpha and Omega |
| CEVA Inc |
Alpha and CEVA Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Alpha and CEVA
The main advantage of trading using opposite Alpha and CEVA positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Alpha position performs unexpectedly, CEVA 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 CEVA will offset losses from the drop in CEVA's long position.| Alpha vs. Eshallgo Class A | Alpha vs. Amtech Systems | Alpha vs. Gold Fields Ltd | Alpha vs. Aegean Airlines SA |
| CEVA vs. MagnaChip Semiconductor | CEVA vs. MACOM Technology Solutions | CEVA vs. FormFactor | CEVA vs. MaxLinear |
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 Stocks Directory module to find actively traded stocks across global markets.
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