Correlation Between Cepton and Mesa Laboratories
Can any of the company-specific risk be diversified away by investing in both Cepton and Mesa Laboratories 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 Cepton and Mesa Laboratories into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Cepton Inc and Mesa Laboratories, you can compare the effects of market volatilities on Cepton and Mesa Laboratories 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 Cepton with a short position of Mesa Laboratories. Check out your portfolio center. Please also check ongoing floating volatility patterns of Cepton and Mesa Laboratories.
Diversification Opportunities for Cepton and Mesa Laboratories
0.0 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between Cepton and Mesa is 0.0. Overlapping area represents the amount of risk that can be diversified away by holding Cepton Inc and Mesa Laboratories in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Mesa Laboratories and Cepton 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 Cepton Inc are associated (or correlated) with Mesa Laboratories. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Mesa Laboratories has no effect on the direction of Cepton i.e., Cepton and Mesa Laboratories go up and down completely randomly.
Pair Corralation between Cepton and Mesa Laboratories
If you would invest 13,753 in Mesa Laboratories on December 2, 2024 and sell it today you would earn a total of 185.00 from holding Mesa Laboratories or generate 1.35% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Flat |
| Strength | Insignificant |
| Accuracy | 0.0% |
| Values | Daily Returns |
Cepton Inc vs. Mesa Laboratories
Performance |
| Timeline |
| Cepton Inc |
Risk-Adjusted Performance
Very Weak
Weak | Strong |
| Mesa Laboratories |
Cepton and Mesa Laboratories Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Cepton and Mesa Laboratories
The main advantage of trading using opposite Cepton and Mesa Laboratories positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Cepton position performs unexpectedly, Mesa Laboratories 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 Mesa Laboratories will offset losses from the drop in Mesa Laboratories' long position.The idea behind Cepton Inc and Mesa Laboratories pairs trading is to make the combined position market-neutral, meaning the overall market's direction will not affect its win or loss (or potential downside or upside). This can be achieved by designing a pairs trade with two highly correlated stocks or equities that operate in a similar space or sector, making it possible to obtain profits through simple and relatively low-risk investment.| Mesa Laboratories vs. Novanta | ||
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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 Comparator module to compare the composition, asset allocations and performance of any two portfolios in your account.
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