Correlation Between CeoTronics and Preferred Bank

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

By analyzing existing cross correlation between CeoTronics AG and Preferred Bank, you can compare the effects of market volatilities on CeoTronics and Preferred Bank 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 Preferred Bank. Check out your portfolio center. Please also check ongoing floating volatility patterns of CeoTronics and Preferred Bank.

Diversification Opportunities for CeoTronics and Preferred Bank

-0.01

Correlation Coefficient

CeoTronics  Preferred Bank

Good diversification

The 3 months correlation between CeoTronics and Preferred is -0.01. Overlapping area represents the amount of risk that can be diversified away by holding CeoTronics AG and Preferred Bank in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Preferred Bank 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 Preferred Bank. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Preferred Bank has no effect on the direction of CeoTronics i.e., CeoTronics and Preferred Bank go up and down completely randomly.

Pair Corralation between CeoTronics and Preferred Bank

Assuming the 90 days trading horizon CeoTronics AG is expected to under-perform the Preferred Bank. In addition to that, CeoTronics is 2.03 times more volatile than Preferred Bank. It trades about -0.02 of its total potential returns per unit of risk. Preferred Bank is currently generating about 0.1 per unit of volatility. If you would invest  7,438  in Preferred Bank on April 24, 2025 and sell it today you would earn a total of  812.00  from holding Preferred Bank or generate 10.92% return on investment over 90 days.

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

CeoTronics AG  vs.  Preferred Bank

CeoTronics AG

Risk-Adjusted Performance

Very Weak

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

Preferred Bank

Risk-Adjusted Performance

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Preferred Bank are ranked lower than 7 (%) of all global equities and portfolios over the last 90 days. Despite nearly unsteady basic indicators, Preferred Bank may actually be approaching a critical reversion point that can send shares even higher in August 2025.

Pair Trading with CeoTronics and Preferred Bank

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

The idea behind CeoTronics AG and Preferred Bank 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 Bollinger Bands module to use Bollinger Bands indicator to analyze target price for a given investing horizon.