Correlation Between CeoTronics and InPlay Oil
Can any of the company-specific risk be diversified away by investing in both CeoTronics and InPlay Oil 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 and InPlay Oil into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between CeoTronics AG and InPlay Oil Corp, you can compare the effects of market volatilities on CeoTronics and InPlay Oil 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 with a short position of InPlay Oil. Check out your portfolio center. Please also check ongoing floating volatility patterns of CeoTronics and InPlay Oil.
Diversification Opportunities for CeoTronics and InPlay Oil
-0.44 | Correlation Coefficient |
Very good diversification
The 3 months correlation between CeoTronics and InPlay is -0.44. Overlapping area represents the amount of risk that can be diversified away by holding CeoTronics AG and InPlay Oil Corp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on InPlay Oil Corp and CeoTronics 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 AG are associated (or correlated) with InPlay Oil. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of InPlay Oil Corp has no effect on the direction of CeoTronics i.e., CeoTronics and InPlay Oil go up and down completely randomly.
Pair Corralation between CeoTronics and InPlay Oil
Assuming the 90 days trading horizon CeoTronics AG is expected to generate 1.05 times more return on investment than InPlay Oil. However, CeoTronics is 1.05 times more volatile than InPlay Oil Corp. It trades about 0.07 of its potential returns per unit of risk. InPlay Oil Corp is currently generating about -0.04 per unit of risk. If you would invest 555.00 in CeoTronics AG on October 24, 2024 and sell it today you would earn a total of 50.00 from holding CeoTronics AG or generate 9.01% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
CeoTronics AG vs. InPlay Oil Corp
Performance |
| Timeline |
| CeoTronics AG |
| InPlay Oil Corp |
CeoTronics and InPlay Oil Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with CeoTronics and InPlay Oil
The main advantage of trading using opposite CeoTronics and InPlay Oil positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if CeoTronics position performs unexpectedly, InPlay Oil 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 InPlay Oil will offset losses from the drop in InPlay Oil's long position.| CeoTronics vs. GLG LIFE TECH | CeoTronics vs. Kingdee International Software | CeoTronics vs. Fast Retailing Co | CeoTronics vs. Agilent Technologies |
| InPlay Oil vs. United Natural Foods | InPlay Oil vs. Ebro Foods SA | InPlay Oil vs. CeoTronics AG | InPlay Oil vs. EBRO FOODS |
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 Content Syndication module to quickly integrate customizable finance content to your own investment portal.
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