Correlation Between Cemtrex Pref and Rekor Systems

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

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

Diversification Opportunities for Cemtrex Pref and Rekor Systems

0.0

Correlation Coefficient

Cemtrex Pref  Rekor Systems

Pay attention - limited upside

The 3 months correlation between Cemtrex and Rekor is 0.0. Overlapping area represents the amount of risk that can be diversified away by holding Cemtrex Pref and Rekor Systems in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Rekor Systems and Cemtrex Pref 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 Cemtrex Pref are associated (or correlated) with Rekor Systems. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Rekor Systems has no effect on the direction of Cemtrex Pref i.e., Cemtrex Pref and Rekor Systems go up and down completely randomly.

Pair Corralation between Cemtrex Pref and Rekor Systems

Assuming the 90 days horizon Cemtrex Pref is expected to generate 1.78 times more return on investment than Rekor Systems. However, Cemtrex Pref is 1.78 times more volatile than Rekor Systems. It trades about 0.11 of its potential returns per unit of risk. Rekor Systems is currently generating about 0.04 per unit of risk. If you would invest  34.00  in Cemtrex Pref on October 9, 2024 and sell it today you would earn a total of  51.00  from holding Cemtrex Pref or generate 150.0% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Flat
Strength	Insignificant
Accuracy	26.21%
Values	Daily Returns

Cemtrex Pref  vs.  Rekor Systems

Cemtrex Pref

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Cemtrex Pref has generated negative risk-adjusted returns adding no value to investors with long positions. Even with relatively invariable basic indicators, Cemtrex Pref is not utilizing all of its potentials. The latest stock price agitation, may contribute to short-term losses for the retail investors.

Rekor Systems

Risk-Adjusted Performance

14 of 100

Good

Compared to the overall equity markets, risk-adjusted returns on investments in Rekor Systems are ranked lower than 14 (%) of all global equities and portfolios over the last 90 days. Even with relatively abnormal forward-looking signals, Rekor Systems reported solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Cemtrex Pref and Rekor Systems

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

The idea behind Cemtrex Pref and Rekor Systems 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 Performance Analysis module to check effects of mean-variance optimization against your current asset allocation.