Correlation Between CEA Industries and Lindsay
Can any of the company-specific risk be diversified away by investing in both CEA Industries and Lindsay 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 CEA Industries and Lindsay into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between CEA Industries and Lindsay, you can compare the effects of market volatilities on CEA Industries and Lindsay 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 CEA Industries with a short position of Lindsay. Check out your portfolio center. Please also check ongoing floating volatility patterns of CEA Industries and Lindsay.
Diversification Opportunities for CEA Industries and Lindsay
-0.51 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between CEA and Lindsay is -0.51. Overlapping area represents the amount of risk that can be diversified away by holding CEA Industries and Lindsay in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Lindsay and CEA 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 CEA Industries are associated (or correlated) with Lindsay. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Lindsay has no effect on the direction of CEA Industries i.e., CEA Industries and Lindsay go up and down completely randomly.
Pair Corralation between CEA Industries and Lindsay
Given the investment horizon of 90 days CEA Industries is expected to under-perform the Lindsay. In addition to that, CEA Industries is 1.0 times more volatile than Lindsay. It trades about -0.31 of its total potential returns per unit of risk. Lindsay is currently generating about 0.2 per unit of volatility. If you would invest 11,787 in Lindsay on August 30, 2024 and sell it today you would earn a total of 1,375 from holding Lindsay or generate 11.67% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
CEA Industries vs. Lindsay
Performance |
| Timeline |
| CEA Industries |
| Lindsay |
CEA Industries and Lindsay Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with CEA Industries and Lindsay
The main advantage of trading using opposite CEA Industries and Lindsay positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if CEA Industries position performs unexpectedly, Lindsay 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 Lindsay will offset losses from the drop in Lindsay's long position.| CEA Industries vs. Thayer Ventures Acquisition | CEA Industries vs. Iveda Solutions Warrant | CEA Industries vs. Aquagold International | CEA Industries vs. Morningstar Unconstrained Allocation |
| Lindsay vs. MYR Group | Lindsay vs. Granite Construction Incorporated | Lindsay vs. Construction Partners | Lindsay vs. Great Lakes Dredge |
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 Sign In To Macroaxis module to sign in to explore Macroaxis' wealth optimization platform and fintech modules.
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