Correlation Between CEA Industries and Manitex International

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

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

Diversification Opportunities for CEA Industries and Manitex International

-0.37

Correlation Coefficient

CEA Industries  Manitex International

Very good diversification

The 3 months correlation between CEA and Manitex is -0.37. Overlapping area represents the amount of risk that can be diversified away by holding CEA Industries Warrant and Manitex International in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Manitex International and CEA Industries 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 CEA Industries Warrant are associated (or correlated) with Manitex International. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Manitex International has no effect on the direction of CEA Industries i.e., CEA Industries and Manitex International go up and down completely randomly.

Pair Corralation between CEA Industries and Manitex International

Assuming the 90 days horizon CEA Industries Warrant is expected to generate 233.97 times more return on investment than Manitex International. However, CEA Industries is 233.97 times more volatile than Manitex International. It trades about 0.29 of its potential returns per unit of risk. Manitex International is currently generating about 0.1 per unit of risk. If you would invest  0.61  in CEA Industries Warrant on September 12, 2024 and sell it today you would earn a total of  2.09  from holding CEA Industries Warrant or generate 342.62% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Insignificant
Accuracy	35.94%
Values	Daily Returns

CEA Industries Warrant  vs.  Manitex International

CEA Industries Warrant

Risk-Adjusted Performance

23 of 100

Solid

Compared to the overall equity markets, risk-adjusted returns on investments in CEA Industries Warrant are ranked lower than 23 (%) of all global equities and portfolios over the last 90 days. In spite of fairly unsteady fundamental indicators, CEA Industries showed solid returns over the last few months and may actually be approaching a breakup point.

Manitex International

Risk-Adjusted Performance

7 of 100

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Manitex International are ranked lower than 7 (%) of all global equities and portfolios over the last 90 days. In spite of fairly strong basic indicators, Manitex International is not utilizing all of its potentials. The latest stock price disturbance, may contribute to short-term losses for the investors.

Pair Trading with CEA Industries and Manitex International

The main advantage of trading using opposite CEA Industries and Manitex International positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if CEA Industries position performs unexpectedly, Manitex International 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 Manitex International will offset losses from the drop in Manitex International's long position.

The idea behind CEA Industries Warrant and Manitex International 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 Bonds Directory module to find actively traded corporate debentures issued by US companies.