Correlation Between Celestica and Kinaxis
Can any of the company-specific risk be diversified away by investing in both Celestica and Kinaxis 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 Celestica and Kinaxis into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Celestica and Kinaxis, you can compare the effects of market volatilities on Celestica and Kinaxis 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 Celestica with a short position of Kinaxis. Check out your portfolio center. Please also check ongoing floating volatility patterns of Celestica and Kinaxis.
Diversification Opportunities for Celestica and Kinaxis
Poor diversification
The 3 months correlation between Celestica and Kinaxis is 0.77. Overlapping area represents the amount of risk that can be diversified away by holding Celestica and Kinaxis in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Kinaxis and Celestica 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 Celestica are associated (or correlated) with Kinaxis. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Kinaxis has no effect on the direction of Celestica i.e., Celestica and Kinaxis go up and down completely randomly.
Pair Corralation between Celestica and Kinaxis
Assuming the 90 days trading horizon Celestica is expected to generate 1.35 times more return on investment than Kinaxis. However, Celestica is 1.35 times more volatile than Kinaxis. It trades about 0.27 of its potential returns per unit of risk. Kinaxis is currently generating about 0.07 per unit of risk. If you would invest 6,883 in Celestica on August 26, 2024 and sell it today you would earn a total of 5,571 from holding Celestica or generate 80.94% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Celestica vs. Kinaxis
Performance |
| Timeline |
| Celestica |
| Kinaxis |
Celestica and Kinaxis Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Celestica and Kinaxis
The main advantage of trading using opposite Celestica and Kinaxis positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Celestica position performs unexpectedly, Kinaxis 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 Kinaxis will offset losses from the drop in Kinaxis' long position.| Celestica vs. Descartes Systems Group | Celestica vs. CAE Inc | Celestica vs. CGI Inc | Celestica vs. Cogeco Communications |
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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