Correlation Between Celestica and Gap,

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

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

Diversification Opportunities for Celestica and Gap,

0.72

Correlation Coefficient

Celestica  Gap,

Poor diversification

The 3 months correlation between Celestica and Gap, is 0.72. Overlapping area represents the amount of risk that can be diversified away by holding Celestica and The Gap, in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Gap, and Celestica 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 Celestica are associated (or correlated) with Gap,. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Gap, has no effect on the direction of Celestica i.e., Celestica and Gap, go up and down completely randomly.

Pair Corralation between Celestica and Gap,

Considering the 90-day investment horizon Celestica is expected to generate 0.88 times more return on investment than Gap,. However, Celestica is 1.14 times less risky than Gap,. It trades about 0.15 of its potential returns per unit of risk. The Gap, is currently generating about 0.05 per unit of risk. If you would invest  1,298  in Celestica on October 11, 2024 and sell it today you would earn a total of  8,949  from holding Celestica or generate 689.45% return on investment over 90 days.

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

Celestica  vs.  The Gap,

Celestica

Risk-Adjusted Performance

18 of 100

Solid

Compared to the overall equity markets, risk-adjusted returns on investments in Celestica are ranked lower than 18 (%) of all global equities and portfolios over the last 90 days. In spite of comparatively uncertain essential indicators, Celestica unveiled solid returns over the last few months and may actually be approaching a breakup point.

Gap,

Risk-Adjusted Performance

5 of 100

Modest

Compared to the overall equity markets, risk-adjusted returns on investments in The Gap, are ranked lower than 5 (%) of all global equities and portfolios over the last 90 days. Even with relatively uncertain basic indicators, Gap, may actually be approaching a critical reversion point that can send shares even higher in February 2025.

Pair Trading with Celestica and Gap,

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

The idea behind Celestica and The Gap, 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 Bollinger Bands module to use Bollinger Bands indicator to analyze target price for a given investing horizon.