Correlation Between CEA Industries and Buhler Industries
Can any of the company-specific risk be diversified away by investing in both CEA Industries and Buhler 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 CEA Industries and Buhler Industries into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between CEA Industries Warrant and Buhler Industries, you can compare the effects of market volatilities on CEA Industries and Buhler 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 CEA Industries with a short position of Buhler Industries. Check out your portfolio center. Please also check ongoing floating volatility patterns of CEA Industries and Buhler Industries.
Diversification Opportunities for CEA Industries and Buhler Industries
0.0 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between CEA and Buhler is 0.0. Overlapping area represents the amount of risk that can be diversified away by holding CEA Industries Warrant and Buhler Industries in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Buhler Industries 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 Warrant are associated (or correlated) with Buhler Industries. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Buhler Industries has no effect on the direction of CEA Industries i.e., CEA Industries and Buhler Industries go up and down completely randomly.
Pair Corralation between CEA Industries and Buhler Industries
Assuming the 90 days horizon CEA Industries Warrant is expected to generate 126.64 times more return on investment than Buhler Industries. However, CEA Industries is 126.64 times more volatile than Buhler Industries. It trades about 0.14 of its potential returns per unit of risk. Buhler Industries is currently generating about 0.04 per unit of risk. If you would invest 15.00 in CEA Industries Warrant on September 2, 2024 and sell it today you would lose (14.21) from holding CEA Industries Warrant or give up 94.73% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Flat |
| Strength | Insignificant |
| Accuracy | 52.11% |
| Values | Daily Returns |
CEA Industries Warrant vs. Buhler Industries
Performance |
| Timeline |
| CEA Industries Warrant |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Solid
| Buhler Industries |
CEA Industries and Buhler Industries Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with CEA Industries and Buhler Industries
The main advantage of trading using opposite CEA Industries and Buhler Industries positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if CEA Industries position performs unexpectedly, Buhler 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 Buhler Industries will offset losses from the drop in Buhler Industries' long position.| CEA Industries vs. Nikola Corp | CEA Industries vs. Wabash National | CEA Industries vs. Titan International | CEA Industries vs. Deere Company |
| Buhler Industries vs. Seychelle Environmtl | Buhler Industries vs. Energy and Water | Buhler Industries vs. One World Universe | Buhler Industries vs. Vow ASA |
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 Efficient Frontier module to plot and analyze your portfolio and positions against risk-return landscape of the market..
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