Correlation Between Celestica and LGL
Can any of the company-specific risk be diversified away by investing in both Celestica and LGL 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 LGL into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Celestica and LGL Group, you can compare the effects of market volatilities on Celestica and LGL 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 LGL. Check out your portfolio center. Please also check ongoing floating volatility patterns of Celestica and LGL.
Diversification Opportunities for Celestica and LGL
Average diversification
The 3 months correlation between Celestica and LGL is 0.17. Overlapping area represents the amount of risk that can be diversified away by holding Celestica and LGL Group in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on LGL Group 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 LGL. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of LGL Group has no effect on the direction of Celestica i.e., Celestica and LGL go up and down completely randomly.
Pair Corralation between Celestica and LGL
Considering the 90-day investment horizon Celestica is expected to generate 1.35 times more return on investment than LGL. However, Celestica is 1.35 times more volatile than LGL Group. It trades about 0.33 of its potential returns per unit of risk. LGL Group is currently generating about 0.02 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 | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Celestica vs. LGL Group
Performance |
| Timeline |
| Celestica |
| LGL Group |
Celestica and LGL Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Celestica and LGL
The main advantage of trading using opposite Celestica and LGL positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Celestica position performs unexpectedly, LGL 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 LGL will offset losses from the drop in LGL'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 Companies Directory module to evaluate performance of over 100,000 Stocks, Funds, and ETFs against different fundamentals.
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