Correlation Between Celebrus Technologies and Cairn Homes
Can any of the company-specific risk be diversified away by investing in both Celebrus Technologies and Cairn Homes 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 Celebrus Technologies and Cairn Homes into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Celebrus Technologies plc and Cairn Homes PLC, you can compare the effects of market volatilities on Celebrus Technologies and Cairn Homes 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 Celebrus Technologies with a short position of Cairn Homes. Check out your portfolio center. Please also check ongoing floating volatility patterns of Celebrus Technologies and Cairn Homes.
Diversification Opportunities for Celebrus Technologies and Cairn Homes
0.23 | Correlation Coefficient |
Modest diversification
The 3 months correlation between Celebrus and Cairn is 0.23. Overlapping area represents the amount of risk that can be diversified away by holding Celebrus Technologies plc and Cairn Homes PLC in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Cairn Homes PLC and Celebrus Technologies 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 Celebrus Technologies plc are associated (or correlated) with Cairn Homes. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Cairn Homes PLC has no effect on the direction of Celebrus Technologies i.e., Celebrus Technologies and Cairn Homes go up and down completely randomly.
Pair Corralation between Celebrus Technologies and Cairn Homes
Assuming the 90 days trading horizon Celebrus Technologies plc is expected to generate 1.25 times more return on investment than Cairn Homes. However, Celebrus Technologies is 1.25 times more volatile than Cairn Homes PLC. It trades about 0.05 of its potential returns per unit of risk. Cairn Homes PLC is currently generating about 0.06 per unit of risk. If you would invest 28,500 in Celebrus Technologies plc on September 2, 2024 and sell it today you would earn a total of 1,750 from holding Celebrus Technologies plc or generate 6.14% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Celebrus Technologies plc vs. Cairn Homes PLC
Performance |
| Timeline |
| Celebrus Technologies plc |
| Cairn Homes PLC |
Celebrus Technologies and Cairn Homes Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Celebrus Technologies and Cairn Homes
The main advantage of trading using opposite Celebrus Technologies and Cairn Homes positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Celebrus Technologies position performs unexpectedly, Cairn Homes 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 Cairn Homes will offset losses from the drop in Cairn Homes' long position.| Celebrus Technologies vs. GB Group plc | Celebrus Technologies vs. Dotdigital Group Plc | Celebrus Technologies vs. Tracsis Plc | Celebrus Technologies vs. Microlise Group PLC |
| Cairn Homes vs. Rightmove PLC | Cairn Homes vs. Bioventix | Cairn Homes vs. VeriSign | Cairn Homes vs. Games Workshop 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 Volatility Analysis module to get historical volatility and risk analysis based on latest market data.
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