Correlation Between CeoTronics and Peninsula Energy
Can any of the company-specific risk be diversified away by investing in both CeoTronics and Peninsula Energy 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 Peninsula Energy into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between CeoTronics AG and Peninsula Energy Limited, you can compare the effects of market volatilities on CeoTronics and Peninsula Energy 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 Peninsula Energy. Check out your portfolio center. Please also check ongoing floating volatility patterns of CeoTronics and Peninsula Energy.
Diversification Opportunities for CeoTronics and Peninsula Energy
-0.58 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between CeoTronics and Peninsula is -0.58. Overlapping area represents the amount of risk that can be diversified away by holding CeoTronics AG and Peninsula Energy Limited in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Peninsula Energy 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 Peninsula Energy. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Peninsula Energy has no effect on the direction of CeoTronics i.e., CeoTronics and Peninsula Energy go up and down completely randomly.
Pair Corralation between CeoTronics and Peninsula Energy
Assuming the 90 days trading horizon CeoTronics is expected to generate 1.88 times less return on investment than Peninsula Energy. But when comparing it to its historical volatility, CeoTronics AG is 3.48 times less risky than Peninsula Energy. It trades about 0.04 of its potential returns per unit of risk. Peninsula Energy Limited is currently generating about 0.02 of returns per unit of risk over similar time horizon. If you would invest 186.00 in Peninsula Energy Limited on November 1, 2024 and sell it today you would lose (107.00) from holding Peninsula Energy Limited or give up 57.53% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
CeoTronics AG vs. Peninsula Energy Limited
Performance |
| Timeline |
| CeoTronics AG |
| Peninsula Energy |
CeoTronics and Peninsula Energy Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with CeoTronics and Peninsula Energy
The main advantage of trading using opposite CeoTronics and Peninsula Energy positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if CeoTronics position performs unexpectedly, Peninsula Energy 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 Peninsula Energy will offset losses from the drop in Peninsula Energy's long position.| CeoTronics vs. Carsales | CeoTronics vs. Thai Beverage Public | CeoTronics vs. US FOODS HOLDING | CeoTronics vs. Molson Coors Beverage |
| Peninsula Energy vs. Carsales | Peninsula Energy vs. CEOTRONICS | Peninsula Energy vs. UNITED UTILITIES GR | Peninsula Energy vs. CeoTronics AG |
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 Premium Stories module to follow Macroaxis premium stories from verified contributors across different equity types, categories and coverage scope.
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