Correlation Between Celestica and EMCORE
Can any of the company-specific risk be diversified away by investing in both Celestica and EMCORE 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 Celestica and EMCORE into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Celestica and EMCORE, you can compare the effects of market volatilities on Celestica and EMCORE 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 Celestica with a short position of EMCORE. Check out your portfolio center. Please also check ongoing floating volatility patterns of Celestica and EMCORE.
Diversification Opportunities for Celestica and EMCORE
Pay attention - limited upside
The 3 months correlation between Celestica and EMCORE is -0.77. Overlapping area represents the amount of risk that can be diversified away by holding Celestica and EMCORE in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on EMCORE and Celestica 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 Celestica are associated (or correlated) with EMCORE. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of EMCORE has no effect on the direction of Celestica i.e., Celestica and EMCORE go up and down completely randomly.
Pair Corralation between Celestica and EMCORE
Considering the 90-day investment horizon Celestica is expected to generate 0.7 times more return on investment than EMCORE. However, Celestica is 1.42 times less risky than EMCORE. It trades about -0.07 of its potential returns per unit of risk. EMCORE is currently generating about -0.24 per unit of risk. If you would invest 4,590 in Celestica on January 30, 2024 and sell it today you would lose (244.00) from holding Celestica or give up 5.32% of portfolio value over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Against |
Strength | Weak |
Accuracy | 100.0% |
Values | Daily Returns |
Celestica vs. EMCORE
Performance |
Timeline |
Celestica |
EMCORE |
Celestica and EMCORE Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with Celestica and EMCORE
The main advantage of trading using opposite Celestica and EMCORE positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Celestica position performs unexpectedly, EMCORE 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 EMCORE will offset losses from the drop in EMCORE's long position.Celestica vs. Richardson Electronics | Celestica vs. Interlink Electronics | Celestica vs. Ouster Inc | Celestica vs. MicroCloud Hologram |
Check out your portfolio center.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 Equity Valuation module to check real value of public entities based on technical and fundamental data.
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