Correlation Between CEOTRONICS and SEAZEN GROUP

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

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

Diversification Opportunities for CEOTRONICS and SEAZEN GROUP

-0.16

Correlation Coefficient

CEOTRONICS  SEAZEN GROUP

Good diversification

The 3 months correlation between CEOTRONICS and SEAZEN is -0.16. Overlapping area represents the amount of risk that can be diversified away by holding CEOTRONICS and SEAZEN GROUP LTD in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on SEAZEN GROUP LTD and CEOTRONICS 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 CEOTRONICS are associated (or correlated) with SEAZEN GROUP. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of SEAZEN GROUP LTD has no effect on the direction of CEOTRONICS i.e., CEOTRONICS and SEAZEN GROUP go up and down completely randomly.

Pair Corralation between CEOTRONICS and SEAZEN GROUP

Assuming the 90 days trading horizon CEOTRONICS is expected to generate 1.45 times more return on investment than SEAZEN GROUP. However, CEOTRONICS is 1.45 times more volatile than SEAZEN GROUP LTD. It trades about 0.11 of its potential returns per unit of risk. SEAZEN GROUP LTD is currently generating about 0.02 per unit of risk. If you would invest  520.00  in CEOTRONICS on September 24, 2024 and sell it today you would earn a total of  50.00  from holding CEOTRONICS or generate 9.62% return on investment over 90 days.

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

CEOTRONICS  vs.  SEAZEN GROUP LTD

CEOTRONICS

Risk-Adjusted Performance

6 of 100

Modest

Compared to the overall equity markets, risk-adjusted returns on investments in CEOTRONICS are ranked lower than 6 (%) 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.

SEAZEN GROUP LTD

Risk-Adjusted Performance

6 of 100

Modest

Compared to the overall equity markets, risk-adjusted returns on investments in SEAZEN GROUP LTD are ranked lower than 6 (%) of all global equities and portfolios over the last 90 days. Despite nearly uncertain essential indicators, SEAZEN GROUP reported solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with CEOTRONICS and SEAZEN GROUP

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

The idea behind CEOTRONICS and SEAZEN GROUP LTD 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 Sectors module to list of equity sectors categorizing publicly traded companies based on their primary business activities.