Correlation Between CeoTronics and HMS Bergbau
Can any of the company-specific risk be diversified away by investing in both CeoTronics and HMS Bergbau 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 HMS Bergbau into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between CeoTronics AG and HMS Bergbau AG, you can compare the effects of market volatilities on CeoTronics and HMS Bergbau 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 HMS Bergbau. Check out your portfolio center. Please also check ongoing floating volatility patterns of CeoTronics and HMS Bergbau.
Diversification Opportunities for CeoTronics and HMS Bergbau
0.51 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between CeoTronics and HMS is 0.51. Overlapping area represents the amount of risk that can be diversified away by holding CeoTronics AG and HMS Bergbau AG in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on HMS Bergbau AG 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 HMS Bergbau. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of HMS Bergbau AG has no effect on the direction of CeoTronics i.e., CeoTronics and HMS Bergbau go up and down completely randomly.
Pair Corralation between CeoTronics and HMS Bergbau
Assuming the 90 days trading horizon CeoTronics AG is expected to generate 2.87 times more return on investment than HMS Bergbau. However, CeoTronics is 2.87 times more volatile than HMS Bergbau AG. It trades about 0.09 of its potential returns per unit of risk. HMS Bergbau AG is currently generating about 0.13 per unit of risk. If you would invest 330.00 in CeoTronics AG on September 12, 2024 and sell it today you would earn a total of 335.00 from holding CeoTronics AG or generate 101.52% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
CeoTronics AG vs. HMS Bergbau AG
Performance |
| Timeline |
| CeoTronics AG |
| HMS Bergbau AG |
CeoTronics and HMS Bergbau Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with CeoTronics and HMS Bergbau
The main advantage of trading using opposite CeoTronics and HMS Bergbau positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if CeoTronics position performs unexpectedly, HMS Bergbau 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 HMS Bergbau will offset losses from the drop in HMS Bergbau's long position.| CeoTronics vs. Cisco Systems | CeoTronics vs. Nokia | CeoTronics vs. Hewlett Packard Enterprise | CeoTronics vs. Superior Plus Corp |
| HMS Bergbau vs. CHINA SHENHUA ENA | HMS Bergbau vs. China Coal Energy | HMS Bergbau vs. Yancoal Australia | HMS Bergbau vs. Banpu PCL |
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 Transaction History module to view history of all your transactions and understand their impact on performance.
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