Correlation Between United States and CeoTronics

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

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

Diversification Opportunities for United States and CeoTronics

-0.15

Correlation Coefficient

United States  CeoTronics

Good diversification

The 3 months correlation between United and CeoTronics is -0.15. Overlapping area represents the amount of risk that can be diversified away by holding United States Steel and CeoTronics AG in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on CeoTronics AG and United States 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 United States Steel are associated (or correlated) with CeoTronics. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of CeoTronics AG has no effect on the direction of United States i.e., United States and CeoTronics go up and down completely randomly.

Pair Corralation between United States and CeoTronics

Assuming the 90 days trading horizon United States is expected to generate 19.09 times less return on investment than CeoTronics. In addition to that, United States is 1.23 times more volatile than CeoTronics AG. It trades about 0.0 of its total potential returns per unit of risk. CeoTronics AG is currently generating about 0.09 per unit of volatility. If you would invest  530.00  in CeoTronics AG on October 23, 2024 and sell it today you would earn a total of  75.00  from holding CeoTronics AG or generate 14.15% return on investment over 90 days.

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

United States Steel  vs.  CeoTronics AG

United States Steel

Risk-Adjusted Performance

0 of 100

Very Weak

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

CeoTronics AG

Risk-Adjusted Performance

7 of 100

OK

Compared to the overall equity markets, risk-adjusted returns on investments in CeoTronics AG are ranked lower than 7 (%) of all global equities and portfolios over the last 90 days. In spite of comparatively fragile forward-looking signals, CeoTronics unveiled solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with United States and CeoTronics

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

The idea behind United States Steel and CeoTronics AG 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 Cryptocurrency Center module to build and monitor diversified portfolio of extremely risky digital assets and cryptocurrency.