Correlation Between Buhler Industries and CEA Industries
Can any of the company-specific risk be diversified away by investing in both Buhler Industries and CEA Industries 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 Buhler Industries and CEA Industries into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Buhler Industries and CEA Industries, you can compare the effects of market volatilities on Buhler Industries and CEA Industries 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 Buhler Industries with a short position of CEA Industries. Check out your portfolio center. Please also check ongoing floating volatility patterns of Buhler Industries and CEA Industries.
Diversification Opportunities for Buhler Industries and CEA Industries
0.0 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between Buhler and CEA is 0.0. Overlapping area represents the amount of risk that can be diversified away by holding Buhler Industries and CEA Industries in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on CEA Industries and Buhler 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 Buhler Industries are associated (or correlated) with CEA Industries. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of CEA Industries has no effect on the direction of Buhler Industries i.e., Buhler Industries and CEA Industries go up and down completely randomly.
Pair Corralation between Buhler Industries and CEA Industries
Assuming the 90 days horizon Buhler Industries is expected to generate 0.28 times more return on investment than CEA Industries. However, Buhler Industries is 3.52 times less risky than CEA Industries. It trades about 0.04 of its potential returns per unit of risk. CEA Industries is currently generating about -0.02 per unit of risk. If you would invest 150.00 in Buhler Industries on August 28, 2024 and sell it today you would earn a total of 38.00 from holding Buhler Industries or generate 25.33% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Flat |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Buhler Industries vs. CEA Industries
Performance |
| Timeline |
| Buhler Industries |
| CEA Industries |
Buhler Industries and CEA Industries Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Buhler Industries and CEA Industries
The main advantage of trading using opposite Buhler Industries and CEA Industries positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Buhler Industries position performs unexpectedly, CEA Industries 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 CEA Industries will offset losses from the drop in CEA Industries' long position.| Buhler Industries vs. Element Solutions | Buhler Industries vs. Orion Engineered Carbons | Buhler Industries vs. Minerals Technologies | Buhler Industries vs. Ingevity Corp |
| CEA Industries vs. Rev Group | CEA Industries vs. Caterpillar | CEA Industries vs. Buhler Industries | CEA Industries vs. Austin Engineering Limited |
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 Optimization module to compute new portfolio that will generate highest expected return given your specified tolerance for risk.
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