Correlation Between Celestica and CROWN

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

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

Diversification Opportunities for Celestica and CROWN

-0.65

Correlation Coefficient

Celestica  CROWN

Excellent diversification

The 3 months correlation between Celestica and CROWN is -0.65. Overlapping area represents the amount of risk that can be diversified away by holding Celestica and CROWN CASTLE INTL in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on CROWN CASTLE INTL 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 CROWN. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of CROWN CASTLE INTL has no effect on the direction of Celestica i.e., Celestica and CROWN go up and down completely randomly.

Pair Corralation between Celestica and CROWN

Considering the 90-day investment horizon Celestica is expected to generate 4.19 times more return on investment than CROWN. However, Celestica is 4.19 times more volatile than CROWN CASTLE INTL. It trades about 0.11 of its potential returns per unit of risk. CROWN CASTLE INTL is currently generating about -0.3 per unit of risk. If you would invest  8,916  in Celestica on September 23, 2024 and sell it today you would earn a total of  629.00  from holding Celestica or generate 7.05% return on investment over 90 days.

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

Celestica  vs.  CROWN CASTLE INTL

Celestica

Risk-Adjusted Performance

23 of 100

Solid

Compared to the overall equity markets, risk-adjusted returns on investments in Celestica are ranked lower than 23 (%) of all global equities and portfolios over the last 90 days. In spite of comparatively inconsistent essential indicators, Celestica unveiled solid returns over the last few months and may actually be approaching a breakup point.

CROWN CASTLE INTL

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days CROWN CASTLE INTL has generated negative risk-adjusted returns adding no value to investors with long positions. Despite latest conflicting performance, the Bond's basic indicators remain strong and the current disturbance on Wall Street may also be a sign of long term gains for CROWN CASTLE INTL investors.

Pair Trading with Celestica and CROWN

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

The idea behind Celestica and CROWN CASTLE INTL 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 Companies Directory module to evaluate performance of over 100,000 Stocks, Funds, and ETFs against different fundamentals.