Correlation Between CEOTRONICS (CEKSG) and John Bean
Can any of the company-specific risk be diversified away by investing in both CEOTRONICS (CEKSG) and John Bean 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 John Bean into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between CEOTRONICS and John Bean Technologies, you can compare the effects of market volatilities on CEOTRONICS (CEKSG) and John Bean 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 John Bean. Check out your portfolio center. Please also check ongoing floating volatility patterns of CEOTRONICS (CEKSG) and John Bean.
Diversification Opportunities for CEOTRONICS (CEKSG) and John Bean
0.53 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between CEOTRONICS and John is 0.53. Overlapping area represents the amount of risk that can be diversified away by holding CEOTRONICS and John Bean Technologies in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on John Bean Technologies 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 John Bean. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of John Bean Technologies has no effect on the direction of CEOTRONICS (CEKSG) i.e., CEOTRONICS (CEKSG) and John Bean go up and down completely randomly.
Pair Corralation between CEOTRONICS (CEKSG) and John Bean
Assuming the 90 days trading horizon CEOTRONICS is expected to generate 1.56 times more return on investment than John Bean. However, CEOTRONICS (CEKSG) is 1.56 times more volatile than John Bean Technologies. It trades about 0.29 of its potential returns per unit of risk. John Bean Technologies is currently generating about 0.38 per unit of risk. If you would invest 515.00 in CEOTRONICS on September 2, 2024 and sell it today you would earn a total of 105.00 from holding CEOTRONICS or generate 20.39% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
CEOTRONICS vs. John Bean Technologies
Performance |
| Timeline |
| CEOTRONICS (CEKSG) |
| John Bean Technologies |
CEOTRONICS (CEKSG) and John Bean Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with CEOTRONICS (CEKSG) and John Bean
The main advantage of trading using opposite CEOTRONICS (CEKSG) and John Bean positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if CEOTRONICS (CEKSG) position performs unexpectedly, John Bean 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 John Bean will offset losses from the drop in John Bean's long position.| CEOTRONICS (CEKSG) vs. Caltagirone SpA | CEOTRONICS (CEKSG) vs. LEGACY IRON ORE | CEOTRONICS (CEKSG) vs. Pebblebrook Hotel Trust | CEOTRONICS (CEKSG) vs. Choice Hotels International |
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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 Volatility module to check portfolio volatility and analyze historical return density to properly model market risk.
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