Correlation Between Renesas Electronics and Celestica

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Can any of the company-specific risk be diversified away by investing in both Renesas Electronics 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 Renesas Electronics and Celestica into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Renesas Electronics and Celestica, you can compare the effects of market volatilities on Renesas Electronics 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 Renesas Electronics with a short position of Celestica. Check out your portfolio center. Please also check ongoing floating volatility patterns of Renesas Electronics and Celestica.

Diversification Opportunities for Renesas Electronics and Celestica

RenesasCelesticaDiversified AwayRenesasCelesticaDiversified Away100%
0.67
  Correlation Coefficient

Poor diversification

The 3 months correlation between Renesas and Celestica is 0.67. Overlapping area represents the amount of risk that can be diversified away by holding Renesas Electronics and Celestica in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Celestica and Renesas Electronics 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 Renesas Electronics 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 Renesas Electronics i.e., Renesas Electronics and Celestica go up and down completely randomly.

Pair Corralation between Renesas Electronics and Celestica

Assuming the 90 days horizon Renesas Electronics is expected to generate 3.24 times less return on investment than Celestica. In addition to that, Renesas Electronics is 1.22 times more volatile than Celestica. It trades about 0.04 of its total potential returns per unit of risk. Celestica is currently generating about 0.14 per unit of volatility. If you would invest  1,300  in Celestica on November 26, 2024 and sell it today you would earn a total of  9,788  from holding Celestica or generate 752.92% return on investment over 90 days.
Time Period3 Months [change]
DirectionMoves Together 
StrengthSignificant
Accuracy88.89%
ValuesDaily Returns

Renesas Electronics  vs.  Celestica

 Performance 
JavaScript chart by amCharts 3.21.15Dec2025Feb 0204060
JavaScript chart by amCharts 3.21.15RNECF CLS
       Timeline  
Renesas Electronics 

Risk-Adjusted Performance

Good

 
Weak
 
Strong
Compared to the overall equity markets, risk-adjusted returns on investments in Renesas Electronics are ranked lower than 11 (%) of all global equities and portfolios over the last 90 days. Despite nearly inconsistent fundamental indicators, Renesas Electronics reported solid returns over the last few months and may actually be approaching a breakup point.
JavaScript chart by amCharts 3.21.15DecJanFebJanFeb11121314151617
Celestica 

Risk-Adjusted Performance

OK

 
Weak
 
Strong
Compared to the overall equity markets, risk-adjusted returns on investments in Celestica are ranked lower than 8 (%) of all global equities and portfolios over the last 90 days. In spite of comparatively uncertain essential indicators, Celestica unveiled solid returns over the last few months and may actually be approaching a breakup point.
JavaScript chart by amCharts 3.21.15DecJanFebJanFeb90100110120130140

Renesas Electronics and Celestica Volatility Contrast

   Predicted Return Density   
JavaScript chart by amCharts 3.21.15-10.69-8.01-5.32-2.640.02.815.678.5211.38 0.0150.0200.0250.0300.035
JavaScript chart by amCharts 3.21.15RNECF CLS
       Returns  

Pair Trading with Renesas Electronics and Celestica

The main advantage of trading using opposite Renesas Electronics and Celestica positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Renesas Electronics 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.
The idea behind Renesas Electronics and Celestica 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.
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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 ETF Categories module to list of ETF categories grouped based on various criteria, such as the investment strategy or type of investments.

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