Correlation Between Celestica and NCR Voyix

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

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

Diversification Opportunities for Celestica and NCR Voyix

0.7

Correlation Coefficient

Celestica  NCR Voyix

Poor diversification

The 3 months correlation between Celestica and NCR is 0.7. Overlapping area represents the amount of risk that can be diversified away by holding Celestica and NCR Voyix in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on NCR Voyix 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 NCR Voyix. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of NCR Voyix has no effect on the direction of Celestica i.e., Celestica and NCR Voyix go up and down completely randomly.

Pair Corralation between Celestica and NCR Voyix

Considering the 90-day investment horizon Celestica is expected to generate 1.47 times more return on investment than NCR Voyix. However, Celestica is 1.47 times more volatile than NCR Voyix. It trades about 0.05 of its potential returns per unit of risk. NCR Voyix is currently generating about -0.08 per unit of risk. If you would invest  9,486  in Celestica on October 7, 2024 and sell it today you would earn a total of  206.00  from holding Celestica or generate 2.17% return on investment over 90 days.

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

Celestica  vs.  NCR Voyix

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 uncertain essential indicators, Celestica unveiled solid returns over the last few months and may actually be approaching a breakup point.

NCR Voyix

Risk-Adjusted Performance

1 of 100

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in NCR Voyix are ranked lower than 1 (%) of all global equities and portfolios over the last 90 days. In spite of fairly strong basic indicators, NCR Voyix is not utilizing all of its potentials. The current stock price disturbance, may contribute to short-term losses for the investors.

Pair Trading with Celestica and NCR Voyix

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

The idea behind Celestica and NCR Voyix 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 Portfolio Manager module to state of the art Portfolio Manager to monitor and improve performance of your invested capital.