Correlation Between CeoTronics and SLR Investment
Can any of the company-specific risk be diversified away by investing in both CeoTronics and SLR Investment 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 SLR Investment into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between CeoTronics AG and SLR Investment Corp, you can compare the effects of market volatilities on CeoTronics and SLR Investment 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 SLR Investment. Check out your portfolio center. Please also check ongoing floating volatility patterns of CeoTronics and SLR Investment.
Diversification Opportunities for CeoTronics and SLR Investment
0.68 | Correlation Coefficient |
Poor diversification
The 3 months correlation between CeoTronics and SLR is 0.68. Overlapping area represents the amount of risk that can be diversified away by holding CeoTronics AG and SLR Investment Corp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on SLR Investment 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 SLR Investment. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of SLR Investment Corp has no effect on the direction of CeoTronics i.e., CeoTronics and SLR Investment go up and down completely randomly.
Pair Corralation between CeoTronics and SLR Investment
Assuming the 90 days trading horizon CeoTronics AG is expected to generate 1.99 times more return on investment than SLR Investment. However, CeoTronics is 1.99 times more volatile than SLR Investment Corp. It trades about 0.05 of its potential returns per unit of risk. SLR Investment Corp is currently generating about 0.07 per unit of risk. If you would invest 428.00 in CeoTronics AG on September 16, 2024 and sell it today you would earn a total of 212.00 from holding CeoTronics AG or generate 49.53% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 99.8% |
| Values | Daily Returns |
CeoTronics AG vs. SLR Investment Corp
Performance |
| Timeline |
| CeoTronics AG |
| SLR Investment Corp |
CeoTronics and SLR Investment Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with CeoTronics and SLR Investment
The main advantage of trading using opposite CeoTronics and SLR Investment positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if CeoTronics position performs unexpectedly, SLR Investment 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 SLR Investment will offset losses from the drop in SLR Investment's long position.| CeoTronics vs. Cisco Systems | CeoTronics vs. Nokia | CeoTronics vs. Superior Plus Corp | CeoTronics vs. SIVERS SEMICONDUCTORS AB |
| SLR Investment vs. Ameriprise Financial | SLR Investment vs. Ares Management Corp | SLR Investment vs. Superior Plus Corp | SLR Investment vs. SIVERS SEMICONDUCTORS AB |
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 Instant Ratings module to determine any equity ratings based on digital recommendations. Macroaxis instant equity ratings are based on combination of fundamental analysis and risk-adjusted market performance.
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