Correlation Between CeoTronics and CHINA OIL

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

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

Diversification Opportunities for CeoTronics and CHINA OIL

0.0

Correlation Coefficient

CeoTronics  CHINA OIL

Pay attention - limited upside

The 3 months correlation between CeoTronics and CHINA is 0.0. Overlapping area represents the amount of risk that can be diversified away by holding CeoTronics AG and CHINA OIL AND in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on CHINA OIL AND and CeoTronics 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 CeoTronics AG are associated (or correlated) with CHINA OIL. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of CHINA OIL AND has no effect on the direction of CeoTronics i.e., CeoTronics and CHINA OIL go up and down completely randomly.

Pair Corralation between CeoTronics and CHINA OIL

If you would invest  516.00  in CeoTronics AG on September 4, 2024 and sell it today you would earn a total of  179.00  from holding CeoTronics AG or generate 34.69% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Flat
Strength	Insignificant
Accuracy	0.0%
Values	Daily Returns

CeoTronics AG  vs.  CHINA OIL AND

CeoTronics AG

Risk-Adjusted Performance

13 of 100

Good

Compared to the overall equity markets, risk-adjusted returns on investments in CeoTronics AG are ranked lower than 13 (%) 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.

CHINA OIL AND

Risk-Adjusted Performance

0 of 100

OK

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

Pair Trading with CeoTronics and CHINA OIL

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

The idea behind CeoTronics AG and CHINA OIL AND 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.