Correlation Between Caltagirone SpA and CEOTRONICS
Can any of the company-specific risk be diversified away by investing in both Caltagirone SpA and CEOTRONICS 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 Caltagirone SpA and CEOTRONICS into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Caltagirone SpA and CEOTRONICS, you can compare the effects of market volatilities on Caltagirone SpA and CEOTRONICS 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 Caltagirone SpA with a short position of CEOTRONICS. Check out your portfolio center. Please also check ongoing floating volatility patterns of Caltagirone SpA and CEOTRONICS.
Diversification Opportunities for Caltagirone SpA and CEOTRONICS
0.36 | Correlation Coefficient |
Weak diversification
The 3 months correlation between Caltagirone and CEOTRONICS is 0.36. Overlapping area represents the amount of risk that can be diversified away by holding Caltagirone SpA and CEOTRONICS in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on CEOTRONICS and Caltagirone SpA 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 Caltagirone SpA are associated (or correlated) with CEOTRONICS. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of CEOTRONICS has no effect on the direction of Caltagirone SpA i.e., Caltagirone SpA and CEOTRONICS go up and down completely randomly.
Pair Corralation between Caltagirone SpA and CEOTRONICS
Assuming the 90 days trading horizon Caltagirone SpA is expected to generate 0.78 times more return on investment than CEOTRONICS. However, Caltagirone SpA is 1.28 times less risky than CEOTRONICS. It trades about 0.08 of its potential returns per unit of risk. CEOTRONICS is currently generating about 0.01 per unit of risk. If you would invest 500.00 in Caltagirone SpA on September 3, 2024 and sell it today you would earn a total of 94.00 from holding Caltagirone SpA or generate 18.8% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Caltagirone SpA vs. CEOTRONICS
Performance |
| Timeline |
| Caltagirone SpA |
| CEOTRONICS |
Caltagirone SpA and CEOTRONICS Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Caltagirone SpA and CEOTRONICS
The main advantage of trading using opposite Caltagirone SpA and CEOTRONICS positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Caltagirone SpA position performs unexpectedly, CEOTRONICS 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 will offset losses from the drop in CEOTRONICS's long position.| Caltagirone SpA vs. Apple Inc | Caltagirone SpA vs. Apple Inc | Caltagirone SpA vs. Apple Inc | Caltagirone SpA vs. Apple Inc |
| CEOTRONICS vs. Xenia Hotels Resorts | CEOTRONICS vs. Wyndham Hotels Resorts | CEOTRONICS vs. NH HOTEL GROUP | CEOTRONICS vs. Japan Asia Investment |
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 Efficient Frontier module to plot and analyze your portfolio and positions against risk-return landscape of the market..
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