Correlation Between CEO Group and Global Electrical

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

By analyzing existing cross correlation between CEO Group JSC and Global Electrical Technology, you can compare the effects of market volatilities on CEO Group and Global Electrical 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 CEO Group with a short position of Global Electrical. Check out your portfolio center. Please also check ongoing floating volatility patterns of CEO Group and Global Electrical.

Diversification Opportunities for CEO Group and Global Electrical

0.82

Correlation Coefficient

CEO Group  Global Electrical

Very poor diversification

The 3 months correlation between CEO and Global is 0.82. Overlapping area represents the amount of risk that can be diversified away by holding CEO Group JSC and Global Electrical Technology in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Global Electrical and CEO Group 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 CEO Group JSC are associated (or correlated) with Global Electrical. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Global Electrical has no effect on the direction of CEO Group i.e., CEO Group and Global Electrical go up and down completely randomly.

Pair Corralation between CEO Group and Global Electrical

Assuming the 90 days trading horizon CEO Group JSC is expected to under-perform the Global Electrical. But the stock apears to be less risky and, when comparing its historical volatility, CEO Group JSC is 3.34 times less risky than Global Electrical. The stock trades about -0.26 of its potential returns per unit of risk. The Global Electrical Technology is currently generating about -0.01 of returns per unit of risk over similar time horizon. If you would invest  2,600,000  in Global Electrical Technology on October 5, 2024 and sell it today you would lose (20,000) from holding Global Electrical Technology or give up 0.77% of portfolio value over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Strong
Accuracy	38.1%
Values	Daily Returns

CEO Group JSC  vs.  Global Electrical Technology

CEO Group JSC

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days CEO Group JSC has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of unfluctuating performance in the last few months, the Stock's basic indicators remain very healthy which may send shares a bit higher in February 2025. The recent disarray may also be a sign of long period up-swing for the firm investors.

Global Electrical

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Global Electrical Technology has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of unfluctuating performance in the last few months, the Stock's basic indicators remain very healthy which may send shares a bit higher in February 2025. The recent disarray may also be a sign of long period up-swing for the firm investors.

Pair Trading with CEO Group and Global Electrical

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

The idea behind CEO Group JSC and Global Electrical Technology 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 Global Markets Map module to get a quick overview of global market snapshot using zoomable world map. Drill down to check world indexes.