Correlation Between ITALIAN WINE and CEOTRONICS (CEKSG)
Can any of the company-specific risk be diversified away by investing in both ITALIAN WINE and CEOTRONICS (CEKSG) 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 ITALIAN WINE and CEOTRONICS (CEKSG) into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between ITALIAN WINE BRANDS and CEOTRONICS, you can compare the effects of market volatilities on ITALIAN WINE and CEOTRONICS (CEKSG) 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 ITALIAN WINE with a short position of CEOTRONICS (CEKSG). Check out your portfolio center. Please also check ongoing floating volatility patterns of ITALIAN WINE and CEOTRONICS (CEKSG).
Diversification Opportunities for ITALIAN WINE and CEOTRONICS (CEKSG)
-0.44 | Correlation Coefficient |
Very good diversification
The 3 months correlation between ITALIAN and CEOTRONICS is -0.44. Overlapping area represents the amount of risk that can be diversified away by holding ITALIAN WINE BRANDS and CEOTRONICS in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on CEOTRONICS (CEKSG) and ITALIAN WINE 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 ITALIAN WINE BRANDS are associated (or correlated) with CEOTRONICS (CEKSG). Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of CEOTRONICS (CEKSG) has no effect on the direction of ITALIAN WINE i.e., ITALIAN WINE and CEOTRONICS (CEKSG) go up and down completely randomly.
Pair Corralation between ITALIAN WINE and CEOTRONICS (CEKSG)
Assuming the 90 days horizon ITALIAN WINE BRANDS is expected to under-perform the CEOTRONICS (CEKSG). But the stock apears to be less risky and, when comparing its historical volatility, ITALIAN WINE BRANDS is 1.58 times less risky than CEOTRONICS (CEKSG). The stock trades about -0.08 of its potential returns per unit of risk. The CEOTRONICS is currently generating about 0.33 of returns per unit of risk over similar time horizon. If you would invest 605.00 in CEOTRONICS on December 13, 2024 and sell it today you would earn a total of 295.00 from holding CEOTRONICS or generate 48.76% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
ITALIAN WINE BRANDS vs. CEOTRONICS
Performance |
| Timeline |
| ITALIAN WINE BRANDS |
| CEOTRONICS (CEKSG) |
ITALIAN WINE and CEOTRONICS (CEKSG) Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with ITALIAN WINE and CEOTRONICS (CEKSG)
The main advantage of trading using opposite ITALIAN WINE and CEOTRONICS (CEKSG) positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if ITALIAN WINE position performs unexpectedly, CEOTRONICS (CEKSG) 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 CEOTRONICS (CEKSG) will offset losses from the drop in CEOTRONICS (CEKSG)'s long position.| ITALIAN WINE vs. Japan Asia Investment | ||
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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 Piotroski F Score module to get Piotroski F Score based on the binary analysis strategy of nine different fundamentals.
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