Correlation Between Celestica and Pinnacle Bank
Can any of the company-specific risk be diversified away by investing in both Celestica and Pinnacle Bank 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 Pinnacle Bank into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Celestica and Pinnacle Bank, you can compare the effects of market volatilities on Celestica and Pinnacle Bank 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 Pinnacle Bank. Check out your portfolio center. Please also check ongoing floating volatility patterns of Celestica and Pinnacle Bank.
Diversification Opportunities for Celestica and Pinnacle Bank
-0.65 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Celestica and Pinnacle is -0.65. Overlapping area represents the amount of risk that can be diversified away by holding Celestica and Pinnacle Bank in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Pinnacle Bank 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 Pinnacle Bank. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Pinnacle Bank has no effect on the direction of Celestica i.e., Celestica and Pinnacle Bank go up and down completely randomly.
Pair Corralation between Celestica and Pinnacle Bank
Considering the 90-day investment horizon Celestica is expected to generate 2.57 times more return on investment than Pinnacle Bank. However, Celestica is 2.57 times more volatile than Pinnacle Bank. It trades about 0.15 of its potential returns per unit of risk. Pinnacle Bank is currently generating about 0.05 per unit of risk. If you would invest 1,360 in Celestica on November 2, 2024 and sell it today you would earn a total of 11,354 from holding Celestica or generate 834.85% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Celestica vs. Pinnacle Bank
Performance |
| Timeline |
| Celestica |
| Pinnacle Bank |
Celestica and Pinnacle Bank Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Celestica and Pinnacle Bank
The main advantage of trading using opposite Celestica and Pinnacle Bank positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Celestica position performs unexpectedly, Pinnacle Bank 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 Pinnacle Bank will offset losses from the drop in Pinnacle Bank's long position.| Celestica vs. Plexus Corp | Celestica vs. Benchmark Electronics | Celestica vs. Flex | Celestica vs. Jabil Circuit |
| Pinnacle Bank vs. Truist Financial Corp | Pinnacle Bank vs. PNC Financial Services | Pinnacle Bank vs. KeyCorp | Pinnacle Bank vs. Western Alliance Bancorporation |
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 Price Transformation module to use Price Transformation models to analyze the depth of different equity instruments across global markets.
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