Correlation Between Celtic Plc and Cordia

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

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

Diversification Opportunities for Celtic Plc and Cordia

-0.13

Correlation Coefficient

Celtic Plc  Cordia

Good diversification

The 3 months correlation between Celtic and Cordia is -0.13. Overlapping area represents the amount of risk that can be diversified away by holding Celtic plc and Cordia in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Cordia and Celtic Plc 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 Celtic plc are associated (or correlated) with Cordia. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Cordia has no effect on the direction of Celtic Plc i.e., Celtic Plc and Cordia go up and down completely randomly.

Pair Corralation between Celtic Plc and Cordia

Assuming the 90 days horizon Celtic plc is expected to generate 0.17 times more return on investment than Cordia. However, Celtic plc is 5.89 times less risky than Cordia. It trades about -0.02 of its potential returns per unit of risk. Cordia is currently generating about -0.24 per unit of risk. If you would invest  212.00  in Celtic plc on December 20, 2024 and sell it today you would lose (16.00) from holding Celtic plc or give up 7.55% of portfolio value over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Insignificant
Accuracy	28.81%
Values	Daily Returns

Celtic plc  vs.  Cordia

Celtic plc

Risk-Adjusted Performance

Very Weak

Over the last 90 days Celtic plc has generated negative risk-adjusted returns adding no value to investors with long positions. Despite nearly stable technical and fundamental indicators, Celtic Plc is not utilizing all of its potentials. The current stock price disturbance, may contribute to mid-run losses for the stockholders.

Cordia

Risk-Adjusted Performance

Very Weak

Over the last 90 days Cordia has generated negative risk-adjusted returns adding no value to investors with long positions. Despite unsteady performance in the last few months, the Stock's basic indicators remain nearly stable which may send shares a bit higher in April 2025. The current disturbance may also be a sign of long-run up-swing for the company stockholders.

Pair Trading with Celtic Plc and Cordia

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

The idea behind Celtic plc and Cordia 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 Transaction History module to view history of all your transactions and understand their impact on performance.