Correlation Between CEOTRONICS (CEKSG) and Arrow Electronics
Can any of the company-specific risk be diversified away by investing in both CEOTRONICS (CEKSG) and Arrow Electronics 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 CEOTRONICS (CEKSG) and Arrow Electronics into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between CEOTRONICS and Arrow Electronics, you can compare the effects of market volatilities on CEOTRONICS (CEKSG) and Arrow Electronics 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 CEOTRONICS (CEKSG) with a short position of Arrow Electronics. Check out your portfolio center. Please also check ongoing floating volatility patterns of CEOTRONICS (CEKSG) and Arrow Electronics.
Diversification Opportunities for CEOTRONICS (CEKSG) and Arrow Electronics
0.06 | Correlation Coefficient |
Significant diversification
The 3 months correlation between CEOTRONICS and Arrow is 0.06. Overlapping area represents the amount of risk that can be diversified away by holding CEOTRONICS and Arrow Electronics in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Arrow Electronics and CEOTRONICS (CEKSG) 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 CEOTRONICS are associated (or correlated) with Arrow Electronics. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Arrow Electronics has no effect on the direction of CEOTRONICS (CEKSG) i.e., CEOTRONICS (CEKSG) and Arrow Electronics go up and down completely randomly.
Pair Corralation between CEOTRONICS (CEKSG) and Arrow Electronics
Assuming the 90 days trading horizon CEOTRONICS is expected to generate 0.82 times more return on investment than Arrow Electronics. However, CEOTRONICS is 1.22 times less risky than Arrow Electronics. It trades about 0.16 of its potential returns per unit of risk. Arrow Electronics is currently generating about -0.16 per unit of risk. If you would invest 525.00 in CEOTRONICS on August 31, 2024 and sell it today you would earn a total of 45.00 from holding CEOTRONICS or generate 8.57% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
CEOTRONICS vs. Arrow Electronics
Performance |
| Timeline |
| CEOTRONICS (CEKSG) |
| Arrow Electronics |
CEOTRONICS (CEKSG) and Arrow Electronics Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with CEOTRONICS (CEKSG) and Arrow Electronics
The main advantage of trading using opposite CEOTRONICS (CEKSG) and Arrow Electronics positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if CEOTRONICS (CEKSG) position performs unexpectedly, Arrow Electronics 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 Arrow Electronics will offset losses from the drop in Arrow Electronics' long position.| CEOTRONICS (CEKSG) vs. InterContinental Hotels Group | CEOTRONICS (CEKSG) vs. CosmoSteel Holdings Limited | CEOTRONICS (CEKSG) vs. LEGACY IRON ORE | CEOTRONICS (CEKSG) vs. CECO ENVIRONMENTAL |
| Arrow Electronics vs. Nucletron Electronic Aktiengesellschaft | Arrow Electronics vs. American Eagle Outfitters | Arrow Electronics vs. VIAPLAY GROUP AB | Arrow Electronics vs. ELECTRONIC ARTS |
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 Risk-Return Analysis module to view associations between returns expected from investment and the risk you assume.
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