Correlation Between VIRG NATL and CEOTRONICS (CEKSG)

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

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

Diversification Opportunities for VIRG NATL and CEOTRONICS (CEKSG)

0.35

Correlation Coefficient

VIRG NATL  CEOTRONICS (CEKSG)

Weak diversification

The 3 months correlation between VIRG and CEOTRONICS is 0.35. Overlapping area represents the amount of risk that can be diversified away by holding VIRG NATL BANKSH and CEOTRONICS in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on CEOTRONICS (CEKSG) and VIRG NATL 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 VIRG NATL BANKSH 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 VIRG NATL i.e., VIRG NATL and CEOTRONICS (CEKSG) go up and down completely randomly.

Pair Corralation between VIRG NATL and CEOTRONICS (CEKSG)

Assuming the 90 days horizon VIRG NATL BANKSH is expected to generate 1.18 times more return on investment than CEOTRONICS (CEKSG). However, VIRG NATL is 1.18 times more volatile than CEOTRONICS. It trades about -0.1 of its potential returns per unit of risk. CEOTRONICS is currently generating about -0.32 per unit of risk. If you would invest  3,868  in VIRG NATL BANKSH on October 4, 2024 and sell it today you would lose (248.00) from holding VIRG NATL BANKSH or give up 6.41% of portfolio value over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Very Weak
Accuracy	100.0%
Values	Daily Returns

VIRG NATL BANKSH  vs.  CEOTRONICS

VIRG NATL BANKSH

Risk-Adjusted Performance

1 of 100

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in VIRG NATL BANKSH are ranked lower than 1 (%) of all global equities and portfolios over the last 90 days. Despite nearly stable basic indicators, VIRG NATL is not utilizing all of its potentials. The newest stock price disturbance, may contribute to mid-run losses for the stockholders.

CEOTRONICS (CEKSG)

Risk-Adjusted Performance

3 of 100

Insignificant

Compared to the overall equity markets, risk-adjusted returns on investments in CEOTRONICS are ranked lower than 3 (%) of all global equities and portfolios over the last 90 days. In spite of comparatively fragile basic indicators, CEOTRONICS (CEKSG) may actually be approaching a critical reversion point that can send shares even higher in February 2025.

Pair Trading with VIRG NATL and CEOTRONICS (CEKSG)

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

The idea behind VIRG NATL BANKSH 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 Portfolio Manager module to state of the art Portfolio Manager to monitor and improve performance of your invested capital.