Correlation Between Nak Sealing and CTCI Corp
Can any of the company-specific risk be diversified away by investing in both Nak Sealing and CTCI Corp 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 Nak Sealing and CTCI Corp into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Nak Sealing Technologies and CTCI Corp, you can compare the effects of market volatilities on Nak Sealing and CTCI Corp 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 Nak Sealing with a short position of CTCI Corp. Check out your portfolio center. Please also check ongoing floating volatility patterns of Nak Sealing and CTCI Corp.
Diversification Opportunities for Nak Sealing and CTCI Corp
0.69 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Nak and CTCI is 0.69. Overlapping area represents the amount of risk that can be diversified away by holding Nak Sealing Technologies and CTCI Corp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on CTCI Corp and Nak Sealing 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 Nak Sealing Technologies are associated (or correlated) with CTCI Corp. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of CTCI Corp has no effect on the direction of Nak Sealing i.e., Nak Sealing and CTCI Corp go up and down completely randomly.
Pair Corralation between Nak Sealing and CTCI Corp
Assuming the 90 days trading horizon Nak Sealing is expected to generate 22.79 times less return on investment than CTCI Corp. In addition to that, Nak Sealing is 1.44 times more volatile than CTCI Corp. It trades about 0.0 of its total potential returns per unit of risk. CTCI Corp is currently generating about 0.14 per unit of volatility. If you would invest 3,910 in CTCI Corp on November 4, 2024 and sell it today you would earn a total of 50.00 from holding CTCI Corp or generate 1.28% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Nak Sealing Technologies vs. CTCI Corp
Performance |
| Timeline |
| Nak Sealing Technologies |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Very Weak
| CTCI Corp |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Very Weak
Nak Sealing and CTCI Corp Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Nak Sealing and CTCI Corp
The main advantage of trading using opposite Nak Sealing and CTCI Corp positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Nak Sealing position performs unexpectedly, CTCI Corp 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 CTCI Corp will offset losses from the drop in CTCI Corp's long position.The idea behind Nak Sealing Technologies and CTCI Corp 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.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 Performance Analysis module to check effects of mean-variance optimization against your current asset allocation.
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