Correlation Between ABERFORTH SMCOS and CTS Eventim
Can any of the company-specific risk be diversified away by investing in both ABERFORTH SMCOS and CTS Eventim 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 ABERFORTH SMCOS and CTS Eventim into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between ABERFORTH SMCOS TRLS 01 and CTS Eventim AG, you can compare the effects of market volatilities on ABERFORTH SMCOS and CTS Eventim 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 ABERFORTH SMCOS with a short position of CTS Eventim. Check out your portfolio center. Please also check ongoing floating volatility patterns of ABERFORTH SMCOS and CTS Eventim.
Diversification Opportunities for ABERFORTH SMCOS and CTS Eventim
-0.01 | Correlation Coefficient |
Good diversification
The 3 months correlation between ABERFORTH and CTS is -0.01. Overlapping area represents the amount of risk that can be diversified away by holding ABERFORTH SMCOS TRLS 01 and CTS Eventim AG in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on CTS Eventim AG and ABERFORTH SMCOS 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 ABERFORTH SMCOS TRLS 01 are associated (or correlated) with CTS Eventim. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of CTS Eventim AG has no effect on the direction of ABERFORTH SMCOS i.e., ABERFORTH SMCOS and CTS Eventim go up and down completely randomly.
Pair Corralation between ABERFORTH SMCOS and CTS Eventim
Assuming the 90 days horizon ABERFORTH SMCOS TRLS 01 is expected to generate 0.29 times more return on investment than CTS Eventim. However, ABERFORTH SMCOS TRLS 01 is 3.48 times less risky than CTS Eventim. It trades about -0.18 of its potential returns per unit of risk. CTS Eventim AG is currently generating about -0.23 per unit of risk. If you would invest 1,760 in ABERFORTH SMCOS TRLS 01 on August 31, 2024 and sell it today you would lose (60.00) from holding ABERFORTH SMCOS TRLS 01 or give up 3.41% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 95.65% |
| Values | Daily Returns |
ABERFORTH SMCOS TRLS 01 vs. CTS Eventim AG
Performance |
| Timeline |
| ABERFORTH SMCOS TRLS |
| CTS Eventim AG |
ABERFORTH SMCOS and CTS Eventim Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with ABERFORTH SMCOS and CTS Eventim
The main advantage of trading using opposite ABERFORTH SMCOS and CTS Eventim positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if ABERFORTH SMCOS position performs unexpectedly, CTS Eventim 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 CTS Eventim will offset losses from the drop in CTS Eventim's long position.| ABERFORTH SMCOS vs. PennyMac Mortgage Investment | ABERFORTH SMCOS vs. POWER METALS | ABERFORTH SMCOS vs. Gladstone Investment | ABERFORTH SMCOS vs. PennantPark Investment |
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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 Aroon Oscillator module to analyze current equity momentum using Aroon Oscillator and other momentum ratios.
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