Correlation Between Celestica and WPLAU

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

By analyzing existing cross correlation between Celestica and WPLAU 365 05 MAR 25, you can compare the effects of market volatilities on Celestica and WPLAU 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 WPLAU. Check out your portfolio center. Please also check ongoing floating volatility patterns of Celestica and WPLAU.

Diversification Opportunities for Celestica and WPLAU

-0.44

Correlation Coefficient

Celestica  WPLAU

Very good diversification

The 3 months correlation between Celestica and WPLAU is -0.44. Overlapping area represents the amount of risk that can be diversified away by holding Celestica and WPLAU 365 05 MAR 25 in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on WPLAU 365 05 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 WPLAU. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of WPLAU 365 05 has no effect on the direction of Celestica i.e., Celestica and WPLAU go up and down completely randomly.

Pair Corralation between Celestica and WPLAU

Considering the 90-day investment horizon Celestica is expected to generate 47.85 times more return on investment than WPLAU. However, Celestica is 47.85 times more volatile than WPLAU 365 05 MAR 25. It trades about 0.27 of its potential returns per unit of risk. WPLAU 365 05 MAR 25 is currently generating about 0.14 per unit of risk. If you would invest  5,433  in Celestica on October 7, 2024 and sell it today you would earn a total of  4,259  from holding Celestica or generate 78.39% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Very Weak
Accuracy	53.97%
Values	Daily Returns

Celestica  vs.  WPLAU 365 05 MAR 25

Celestica

Risk-Adjusted Performance

20 of 100

Solid

Compared to the overall equity markets, risk-adjusted returns on investments in Celestica are ranked lower than 20 (%) of all global equities and portfolios over the last 90 days. In spite of comparatively unfluctuating essential indicators, Celestica unveiled solid returns over the last few months and may actually be approaching a breakup point.

WPLAU 365 05

Risk-Adjusted Performance

10 of 100

OK

Compared to the overall equity markets, risk-adjusted returns on investments in WPLAU 365 05 MAR 25 are ranked lower than 10 (%) of all global equities and portfolios over the last 90 days. Despite somewhat strong basic indicators, WPLAU is not utilizing all of its potentials. The latest stock price disturbance, may contribute to short-term losses for the investors.

Pair Trading with Celestica and WPLAU

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

The idea behind Celestica and WPLAU 365 05 MAR 25 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 Competition Analyzer module to analyze and compare many basic indicators for a group of related or unrelated entities.