Correlation Between CEOTRONICS and SEGRO Plc

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

By analyzing existing cross correlation between CEOTRONICS and SEGRO Plc, you can compare the effects of market volatilities on CEOTRONICS and SEGRO Plc 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 SEGRO Plc. Check out your portfolio center. Please also check ongoing floating volatility patterns of CEOTRONICS and SEGRO Plc.

Diversification Opportunities for CEOTRONICS and SEGRO Plc

-0.15

Correlation Coefficient

CEOTRONICS  SEGRO Plc

Good diversification

The 3 months correlation between CEOTRONICS and SEGRO is -0.15. Overlapping area represents the amount of risk that can be diversified away by holding CEOTRONICS and SEGRO Plc in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on SEGRO Plc 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 SEGRO Plc. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of SEGRO Plc has no effect on the direction of CEOTRONICS i.e., CEOTRONICS and SEGRO Plc go up and down completely randomly.

Pair Corralation between CEOTRONICS and SEGRO Plc

Assuming the 90 days trading horizon CEOTRONICS is expected to generate 2.77 times more return on investment than SEGRO Plc. However, CEOTRONICS is 2.77 times more volatile than SEGRO Plc. It trades about 0.16 of its potential returns per unit of risk. SEGRO Plc is currently generating about 0.02 per unit of risk. If you would invest  575.00  in CEOTRONICS on December 31, 2024 and sell it today you would earn a total of  295.00  from holding CEOTRONICS or generate 51.3% return on investment over 90 days.

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

CEOTRONICS  vs.  SEGRO Plc

CEOTRONICS

Risk-Adjusted Performance

Good

Compared to the overall equity markets, risk-adjusted returns on investments in CEOTRONICS are ranked lower than 12 (%) 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.

SEGRO Plc

Risk-Adjusted Performance

Weak

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

Pair Trading with CEOTRONICS and SEGRO Plc

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

The idea behind CEOTRONICS and SEGRO Plc 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.

Check out your portfolio center.

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 Equity Analysis module to research over 250,000 global equities including funds, stocks and ETFs to find investment opportunities.