Correlation Between CONSOLIDATED and Celestica

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

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

Diversification Opportunities for CONSOLIDATED and Celestica

-0.53

Correlation Coefficient

CONSOLIDATED  Celestica

Excellent diversification

The 3 months correlation between CONSOLIDATED and Celestica is -0.53. Overlapping area represents the amount of risk that can be diversified away by holding CONSOLIDATED EDISON N and Celestica in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Celestica and CONSOLIDATED 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 CONSOLIDATED EDISON N 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 CONSOLIDATED i.e., CONSOLIDATED and Celestica go up and down completely randomly.

Pair Corralation between CONSOLIDATED and Celestica

Assuming the 90 days trading horizon CONSOLIDATED EDISON N is expected to generate 0.14 times more return on investment than Celestica. However, CONSOLIDATED EDISON N is 6.96 times less risky than Celestica. It trades about 0.08 of its potential returns per unit of risk. Celestica is currently generating about 0.0 per unit of risk. If you would invest  10,668  in CONSOLIDATED EDISON N on December 26, 2024 and sell it today you would earn a total of  351.00  from holding CONSOLIDATED EDISON N or generate 3.29% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Very Weak
Accuracy	78.69%
Values	Daily Returns

CONSOLIDATED EDISON N  vs.  Celestica

CONSOLIDATED EDISON

Risk-Adjusted Performance

Modest

Compared to the overall equity markets, risk-adjusted returns on investments in CONSOLIDATED EDISON N are ranked lower than 6 (%) of all global equities and portfolios over the last 90 days. Despite somewhat strong basic indicators, CONSOLIDATED is not utilizing all of its potentials. The new stock price disturbance, may contribute to short-term losses for the investors.

Celestica

Risk-Adjusted Performance

Weak

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

Pair Trading with CONSOLIDATED and Celestica

The main advantage of trading using opposite CONSOLIDATED and Celestica positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if CONSOLIDATED 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 CONSOLIDATED EDISON N 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 Positions Ratings module to determine portfolio positions ratings based on digital equity recommendations. Macroaxis instant position ratings are based on combination of fundamental analysis and risk-adjusted market performance.