Correlation Between Celebrus Technologies and Direct Line
Can any of the company-specific risk be diversified away by investing in both Celebrus Technologies and Direct Line 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 Direct Line 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 Direct Line Insurance, you can compare the effects of market volatilities on Celebrus Technologies and Direct Line 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 Direct Line. Check out your portfolio center. Please also check ongoing floating volatility patterns of Celebrus Technologies and Direct Line.
Diversification Opportunities for Celebrus Technologies and Direct Line
-0.7 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Celebrus and Direct is -0.7. Overlapping area represents the amount of risk that can be diversified away by holding Celebrus Technologies plc and Direct Line Insurance in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Direct Line Insurance 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 Direct Line. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Direct Line Insurance has no effect on the direction of Celebrus Technologies i.e., Celebrus Technologies and Direct Line go up and down completely randomly.
Pair Corralation between Celebrus Technologies and Direct Line
Assuming the 90 days trading horizon Celebrus Technologies plc is expected to generate 15.37 times more return on investment than Direct Line. However, Celebrus Technologies is 15.37 times more volatile than Direct Line Insurance. It trades about 0.05 of its potential returns per unit of risk. Direct Line Insurance is currently generating about 0.05 per unit of risk. If you would invest 108.00 in Celebrus Technologies plc on December 1, 2024 and sell it today you would earn a total of 24,392 from holding Celebrus Technologies plc or generate 22585.19% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Celebrus Technologies plc vs. Direct Line Insurance
Performance |
| Timeline |
| Celebrus Technologies plc |
| Direct Line Insurance |
Celebrus Technologies and Direct Line Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Celebrus Technologies and Direct Line
The main advantage of trading using opposite Celebrus Technologies and Direct Line positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Celebrus Technologies position performs unexpectedly, Direct Line 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 Direct Line will offset losses from the drop in Direct Line's long position.| Celebrus Technologies vs. GB Group plc | Celebrus Technologies vs. Pensionbee Group PLC | Celebrus Technologies vs. Dotdigital Group Plc | Celebrus Technologies vs. AdvancedAdvT |
| Direct Line vs. Molson Coors Beverage | Direct Line vs. MoneysupermarketCom Group PLC | Direct Line vs. FC Investment Trust | Direct Line vs. Tyson Foods Cl |
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 Portfolio Rebalancing module to analyze risk-adjusted returns against different time horizons to find asset-allocation targets.
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