Correlation Between CeoTronics and Aena SME
Can any of the company-specific risk be diversified away by investing in both CeoTronics and Aena SME 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 Aena SME into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between CeoTronics AG and Aena SME SA, you can compare the effects of market volatilities on CeoTronics and Aena SME 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 Aena SME. Check out your portfolio center. Please also check ongoing floating volatility patterns of CeoTronics and Aena SME.
Diversification Opportunities for CeoTronics and Aena SME
0.54 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between CeoTronics and Aena is 0.54. Overlapping area represents the amount of risk that can be diversified away by holding CeoTronics AG and Aena SME SA in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Aena SME SA 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 Aena SME. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Aena SME SA has no effect on the direction of CeoTronics i.e., CeoTronics and Aena SME go up and down completely randomly.
Pair Corralation between CeoTronics and Aena SME
Assuming the 90 days trading horizon CeoTronics AG is expected to generate 3.83 times more return on investment than Aena SME. However, CeoTronics is 3.83 times more volatile than Aena SME SA. It trades about 0.31 of its potential returns per unit of risk. Aena SME SA is currently generating about 0.04 per unit of risk. If you would invest 521.00 in CeoTronics AG on September 1, 2024 and sell it today you would earn a total of 119.00 from holding CeoTronics AG or generate 22.84% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 95.65% |
| Values | Daily Returns |
CeoTronics AG vs. Aena SME SA
Performance |
| Timeline |
| CeoTronics AG |
| Aena SME SA |
CeoTronics and Aena SME Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with CeoTronics and Aena SME
The main advantage of trading using opposite CeoTronics and Aena SME positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if CeoTronics position performs unexpectedly, Aena SME 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 Aena SME will offset losses from the drop in Aena SME's long position.| CeoTronics vs. Motorola Solutions | CeoTronics vs. Nokia | CeoTronics vs. ZTE Corporation | CeoTronics vs. Hewlett Packard Enterprise |
| Aena SME vs. CeoTronics AG | Aena SME vs. REVO INSURANCE SPA | Aena SME vs. Webster Financial | Aena SME vs. Mizuho Financial Group |
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 Global Markets Map module to get a quick overview of global market snapshot using zoomable world map. Drill down to check world indexes.
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