Correlation Between CeoTronics and CEOTRONICS (CEKSG)
Can any of the company-specific risk be diversified away by investing in both CeoTronics and CEOTRONICS (CEKSG) 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 CEOTRONICS (CEKSG) into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between CeoTronics AG and CEOTRONICS, you can compare the effects of market volatilities on CeoTronics and CEOTRONICS (CEKSG) 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 CEOTRONICS (CEKSG). Check out your portfolio center. Please also check ongoing floating volatility patterns of CeoTronics and CEOTRONICS (CEKSG).
Diversification Opportunities for CeoTronics and CEOTRONICS (CEKSG)
0.8 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between CeoTronics and CEOTRONICS is 0.8. Overlapping area represents the amount of risk that can be diversified away by holding CeoTronics AG and CEOTRONICS in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on CEOTRONICS (CEKSG) 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 CEOTRONICS (CEKSG). Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of CEOTRONICS (CEKSG) has no effect on the direction of CeoTronics i.e., CeoTronics and CEOTRONICS (CEKSG) go up and down completely randomly.
Pair Corralation between CeoTronics and CEOTRONICS (CEKSG)
Assuming the 90 days trading horizon CeoTronics AG is expected to generate 0.87 times more return on investment than CEOTRONICS (CEKSG). However, CeoTronics AG is 1.15 times less risky than CEOTRONICS (CEKSG). It trades about -0.03 of its potential returns per unit of risk. CEOTRONICS is currently generating about -0.04 per unit of risk. If you would invest 559.00 in CeoTronics AG on August 29, 2024 and sell it today you would lose (9.00) from holding CeoTronics AG or give up 1.61% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
CeoTronics AG vs. CEOTRONICS
Performance |
| Timeline |
| CeoTronics AG |
| CEOTRONICS (CEKSG) |
CeoTronics and CEOTRONICS (CEKSG) Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with CeoTronics and CEOTRONICS (CEKSG)
The main advantage of trading using opposite CeoTronics and CEOTRONICS (CEKSG) positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if CeoTronics position performs unexpectedly, CEOTRONICS (CEKSG) 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 CEOTRONICS (CEKSG) will offset losses from the drop in CEOTRONICS (CEKSG)'s long position.| CeoTronics vs. Beyond Meat | CeoTronics vs. JJ SNACK FOODS | CeoTronics vs. Globe Trade Centre | CeoTronics vs. JAPAN TOBACCO UNSPADR12 |
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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 Correlation Analysis module to reduce portfolio risk simply by holding instruments which are not perfectly correlated.
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