Correlation Between Celestica and Flex
Can any of the company-specific risk be diversified away by investing in both Celestica and Flex 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 Flex into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Celestica and Flex, you can compare the effects of market volatilities on Celestica and Flex 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 Flex. Check out your portfolio center. Please also check ongoing floating volatility patterns of Celestica and Flex.
Diversification Opportunities for Celestica and Flex
Almost no diversification
The 3 months correlation between Celestica and Flex is 0.95. Overlapping area represents the amount of risk that can be diversified away by holding Celestica and Flex in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Flex 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 Flex. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Flex has no effect on the direction of Celestica i.e., Celestica and Flex go up and down completely randomly.
Pair Corralation between Celestica and Flex
Considering the 90-day investment horizon Celestica is expected to generate 1.08 times more return on investment than Flex. However, Celestica is 1.08 times more volatile than Flex. It trades about 0.33 of its potential returns per unit of risk. Flex is currently generating about 0.28 per unit of risk. If you would invest 7,030 in Celestica on August 27, 2024 and sell it today you would earn a total of 1,530 from holding Celestica or generate 21.76% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Celestica vs. Flex
Performance |
| Timeline |
| Celestica |
| Flex |
Celestica and Flex Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Celestica and Flex
The main advantage of trading using opposite Celestica and Flex positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Celestica position performs unexpectedly, Flex 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 Flex will offset losses from the drop in Flex's long position.| Celestica vs. Plexus Corp | Celestica vs. Benchmark Electronics | Celestica vs. Flex | Celestica vs. Jabil Circuit |
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 Premium Stories module to follow Macroaxis premium stories from verified contributors across different equity types, categories and coverage scope.
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