Correlation Between Celestica and Wilton Resources
Can any of the company-specific risk be diversified away by investing in both Celestica and Wilton Resources 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 Wilton Resources into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Celestica and Wilton Resources, you can compare the effects of market volatilities on Celestica and Wilton Resources 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 Wilton Resources. Check out your portfolio center. Please also check ongoing floating volatility patterns of Celestica and Wilton Resources.
Diversification Opportunities for Celestica and Wilton Resources
0.73 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Celestica and Wilton is 0.73. Overlapping area represents the amount of risk that can be diversified away by holding Celestica and Wilton Resources in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Wilton Resources 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 Wilton Resources. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Wilton Resources has no effect on the direction of Celestica i.e., Celestica and Wilton Resources go up and down completely randomly.
Pair Corralation between Celestica and Wilton Resources
Considering the 90-day investment horizon Celestica is expected to generate 1.27 times more return on investment than Wilton Resources. However, Celestica is 1.27 times more volatile than Wilton Resources. It trades about 0.45 of its potential returns per unit of risk. Wilton Resources is currently generating about 0.26 per unit of risk. If you would invest 9,305 in Celestica on October 20, 2024 and sell it today you would earn a total of 2,023 from holding Celestica or generate 21.74% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 95.24% |
| Values | Daily Returns |
Celestica vs. Wilton Resources
Performance |
| Timeline |
| Celestica |
| Wilton Resources |
Celestica and Wilton Resources Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Celestica and Wilton Resources
The main advantage of trading using opposite Celestica and Wilton Resources positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Celestica position performs unexpectedly, Wilton Resources 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 Wilton Resources will offset losses from the drop in Wilton Resources' long position.| Celestica vs. Plexus Corp | Celestica vs. Benchmark Electronics | Celestica vs. Flex | Celestica vs. Jabil Circuit |
| Wilton Resources vs. Santa Fe Petroleum | Wilton Resources vs. Liberty Energy Corp | Wilton Resources vs. Rodinia Oil Corp | Wilton Resources vs. Mountainview Energy |
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 Portfolio File Import module to quickly import all of your third-party portfolios from your local drive in csv format.
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