Correlation Between Cepton and Electro Sensors
Can any of the company-specific risk be diversified away by investing in both Cepton and Electro Sensors 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 Electro Sensors into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Cepton Inc and Electro Sensors, you can compare the effects of market volatilities on Cepton and Electro Sensors 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 Electro Sensors. Check out your portfolio center. Please also check ongoing floating volatility patterns of Cepton and Electro Sensors.
Diversification Opportunities for Cepton and Electro Sensors
0.0 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between Cepton and Electro is 0.0. Overlapping area represents the amount of risk that can be diversified away by holding Cepton Inc and Electro Sensors in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Electro Sensors 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 Electro Sensors. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Electro Sensors has no effect on the direction of Cepton i.e., Cepton and Electro Sensors go up and down completely randomly.
Pair Corralation between Cepton and Electro Sensors
If you would invest (100.00) in Cepton Inc on December 11, 2024 and sell it today you would earn a total of 100.00 from holding Cepton Inc or generate -100.0% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Flat |
| Strength | Insignificant |
| Accuracy | 0.0% |
| Values | Daily Returns |
Cepton Inc vs. Electro Sensors
Performance |
| Timeline |
| Cepton Inc |
Risk-Adjusted Performance
Very Weak
Weak | Strong |
| Electro Sensors |
Cepton and Electro Sensors Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Cepton and Electro Sensors
The main advantage of trading using opposite Cepton and Electro Sensors positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Cepton position performs unexpectedly, Electro Sensors 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 Electro Sensors will offset losses from the drop in Electro Sensors' long position.The idea behind Cepton Inc and Electro Sensors 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.| Electro Sensors vs. Sono Tek Corp | Electro Sensors vs. Vishay Precision Group | Electro Sensors vs. Keyence | Electro Sensors vs. Trimble |
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 Aroon Oscillator module to analyze current equity momentum using Aroon Oscillator and other momentum ratios.
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