Correlation Between NexGel Warrant and Celestica

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

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

Diversification Opportunities for NexGel Warrant and Celestica

0.02

Correlation Coefficient

NexGel Warrant  Celestica

Significant diversification

The 3 months correlation between NexGel and Celestica is 0.02. Overlapping area represents the amount of risk that can be diversified away by holding NexGel Warrant and Celestica in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Celestica and NexGel Warrant 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 NexGel Warrant are associated (or correlated) with Celestica. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Celestica has no effect on the direction of NexGel Warrant i.e., NexGel Warrant and Celestica go up and down completely randomly.

Pair Corralation between NexGel Warrant and Celestica

Assuming the 90 days horizon NexGel Warrant is expected to under-perform the Celestica. In addition to that, NexGel Warrant is 1.35 times more volatile than Celestica. It trades about -0.08 of its total potential returns per unit of risk. Celestica is currently generating about 0.03 per unit of volatility. If you would invest  9,752  in Celestica on December 23, 2024 and sell it today you would lose (157.00) from holding Celestica or give up 1.61% of portfolio value over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Insignificant
Accuracy	90.16%
Values	Daily Returns

NexGel Warrant  vs.  Celestica

NexGel Warrant

Risk-Adjusted Performance

Very Weak

Over the last 90 days NexGel Warrant has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of conflicting performance in the last few months, the Stock's essential indicators remain fairly stable which may send shares a bit higher in April 2025. The latest fuss may also be a sign of long-term up-swing for the venture sophisticated investors.

Celestica

Risk-Adjusted Performance

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in Celestica are ranked lower than 2 (%) of all global equities and portfolios over the last 90 days. In spite of comparatively uncertain essential indicators, Celestica may actually be approaching a critical reversion point that can send shares even higher in April 2025.

Pair Trading with NexGel Warrant and Celestica

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

The idea behind NexGel Warrant and Celestica 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 Bond Analysis module to evaluate and analyze corporate bonds as a potential investment for your portfolios..