Correlation Between Etsy and CEOTRONICS

Can any of the company-specific risk be diversified away by investing in both Etsy 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 Etsy and CEOTRONICS into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between Etsy Inc and CEOTRONICS, you can compare the effects of market volatilities on Etsy 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 Etsy with a short position of CEOTRONICS. Check out your portfolio center. Please also check ongoing floating volatility patterns of Etsy and CEOTRONICS.

Diversification Opportunities for Etsy and CEOTRONICS

-0.89

Correlation Coefficient

Etsy  CEOTRONICS

Pay attention - limited upside

The 3 months correlation between Etsy and CEOTRONICS is -0.89. Overlapping area represents the amount of risk that can be diversified away by holding Etsy Inc and CEOTRONICS in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on CEOTRONICS and Etsy 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 Etsy Inc 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 Etsy i.e., Etsy and CEOTRONICS go up and down completely randomly.

Pair Corralation between Etsy and CEOTRONICS

Assuming the 90 days trading horizon Etsy Inc is expected to under-perform the CEOTRONICS. But the stock apears to be less risky and, when comparing its historical volatility, Etsy Inc is 1.44 times less risky than CEOTRONICS. The stock trades about -0.13 of its potential returns per unit of risk. The CEOTRONICS is currently generating about 0.2 of returns per unit of risk over similar time horizon. If you would invest  585.00  in CEOTRONICS on December 23, 2024 and sell it today you would earn a total of  370.00  from holding CEOTRONICS or generate 63.25% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Significant
Accuracy	100.0%
Values	Daily Returns

Etsy Inc  vs.  CEOTRONICS

Etsy Inc

Risk-Adjusted Performance

Very Weak

Over the last 90 days Etsy Inc has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of fragile performance in the last few months, the Stock's basic indicators remain comparatively stable which may send shares a bit higher in April 2025. The newest uproar may also be a sign of mid-term up-swing for the firm private investors.

CEOTRONICS

Risk-Adjusted Performance

Good

Compared to the overall equity markets, risk-adjusted returns on investments in CEOTRONICS are ranked lower than 15 (%) of all global equities and portfolios over the last 90 days. In spite of comparatively fragile basic indicators, CEOTRONICS unveiled solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Etsy and CEOTRONICS

The main advantage of trading using opposite Etsy and CEOTRONICS positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Etsy 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.

The idea behind Etsy Inc and CEOTRONICS 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 Fundamental Analysis module to view fundamental data based on most recent published financial statements.