Correlation Between Celestica and BASE
Can any of the company-specific risk be diversified away by investing in both Celestica and BASE 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 BASE into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Celestica and BASE Inc, you can compare the effects of market volatilities on Celestica and BASE 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 BASE. Check out your portfolio center. Please also check ongoing floating volatility patterns of Celestica and BASE.
Diversification Opportunities for Celestica and BASE
Poor diversification
The 3 months correlation between Celestica and BASE is 0.77. Overlapping area represents the amount of risk that can be diversified away by holding Celestica and BASE Inc in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on BASE Inc 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 BASE. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of BASE Inc has no effect on the direction of Celestica i.e., Celestica and BASE go up and down completely randomly.
Pair Corralation between Celestica and BASE
Considering the 90-day investment horizon Celestica is expected to generate 1.05 times more return on investment than BASE. However, Celestica is 1.05 times more volatile than BASE Inc. It trades about 0.21 of its potential returns per unit of risk. BASE Inc is currently generating about 0.05 per unit of risk. If you would invest 4,645 in Celestica on November 2, 2024 and sell it today you would earn a total of 6,770 from holding Celestica or generate 145.75% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 99.04% |
| Values | Daily Returns |
Celestica vs. BASE Inc
Performance |
| Timeline |
| Celestica |
| BASE Inc |
Celestica and BASE Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Celestica and BASE
The main advantage of trading using opposite Celestica and BASE positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Celestica position performs unexpectedly, BASE 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 BASE will offset losses from the drop in BASE's long position.| Celestica vs. Plexus Corp | Celestica vs. Benchmark Electronics | Celestica vs. Flex | Celestica vs. Jabil Circuit |
| BASE vs. CurrentC Power | BASE vs. Agent Information Software | BASE vs. Auddia Inc | BASE vs. Maxwell Resource |
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 Idea Optimizer module to use advanced portfolio builder with pre-computed micro ideas to build optimal portfolio .
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