Correlation Between Eagle Eye and Celebrus Technologies

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

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

Diversification Opportunities for Eagle Eye and Celebrus Technologies

0.13

Correlation Coefficient

Eagle Eye  Celebrus Technologies

Average diversification

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

Pair Corralation between Eagle Eye and Celebrus Technologies

Assuming the 90 days trading horizon Eagle Eye Solutions is expected to generate 0.79 times more return on investment than Celebrus Technologies. However, Eagle Eye Solutions is 1.26 times less risky than Celebrus Technologies. It trades about 0.16 of its potential returns per unit of risk. Celebrus Technologies plc is currently generating about -0.47 per unit of risk. If you would invest  47,000  in Eagle Eye Solutions on September 22, 2024 and sell it today you would earn a total of  1,500  from holding Eagle Eye Solutions or generate 3.19% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Insignificant
Accuracy	95.65%
Values	Daily Returns

Eagle Eye Solutions  vs.  Celebrus Technologies plc

Eagle Eye Solutions

Risk-Adjusted Performance

4 of 100

Insignificant

Compared to the overall equity markets, risk-adjusted returns on investments in Eagle Eye Solutions are ranked lower than 4 (%) of all global equities and portfolios over the last 90 days. In spite of rather sound technical and fundamental indicators, Eagle Eye is not utilizing all of its potentials. The newest stock price tumult, may contribute to shorter-term losses for the shareholders.

Celebrus Technologies plc

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Celebrus Technologies plc has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of comparatively stable basic indicators, Celebrus Technologies is not utilizing all of its potentials. The latest stock price uproar, may contribute to short-horizon losses for the private investors.

Pair Trading with Eagle Eye and Celebrus Technologies

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

The idea behind Eagle Eye Solutions and Celebrus Technologies plc 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 Instant Ratings module to determine any equity ratings based on digital recommendations. Macroaxis instant equity ratings are based on combination of fundamental analysis and risk-adjusted market performance.