Correlation Between Enghouse Systems and Celestica
Can any of the company-specific risk be diversified away by investing in both Enghouse Systems and Celestica 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 Enghouse Systems and Celestica into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Enghouse Systems and Celestica, you can compare the effects of market volatilities on Enghouse Systems and Celestica 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 Enghouse Systems with a short position of Celestica. Check out your portfolio center. Please also check ongoing floating volatility patterns of Enghouse Systems and Celestica.
Diversification Opportunities for Enghouse Systems and Celestica
-0.51 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Enghouse and Celestica is -0.51. Overlapping area represents the amount of risk that can be diversified away by holding Enghouse Systems and Celestica in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Celestica and Enghouse Systems 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 Enghouse Systems are associated (or correlated) with Celestica. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Celestica has no effect on the direction of Enghouse Systems i.e., Enghouse Systems and Celestica go up and down completely randomly.
Pair Corralation between Enghouse Systems and Celestica
Assuming the 90 days trading horizon Enghouse Systems is expected to under-perform the Celestica. But the stock apears to be less risky and, when comparing its historical volatility, Enghouse Systems is 1.99 times less risky than Celestica. The stock trades about -0.13 of its potential returns per unit of risk. The Celestica is currently generating about 0.28 of returns per unit of risk over similar time horizon. If you would invest 9,736 in Celestica on August 30, 2024 and sell it today you would earn a total of 1,934 from holding Celestica or generate 19.86% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 95.65% |
| Values | Daily Returns |
Enghouse Systems vs. Celestica
Performance |
| Timeline |
| Enghouse Systems |
| Celestica |
Enghouse Systems and Celestica Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Enghouse Systems and Celestica
The main advantage of trading using opposite Enghouse Systems and Celestica positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Enghouse Systems position performs unexpectedly, Celestica 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 Celestica will offset losses from the drop in Celestica's long position.| Enghouse Systems vs. Kinaxis | Enghouse Systems vs. Open Text Corp | Enghouse Systems vs. Descartes Systems Group | Enghouse Systems vs. Constellation Software |
| Celestica vs. Descartes Systems Group | Celestica vs. CAE Inc | Celestica vs. CGI Inc | Celestica vs. Cogeco Communications |
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 Performance Analysis module to check effects of mean-variance optimization against your current asset allocation.
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