Correlation Between Color Star and CTS
Can any of the company-specific risk be diversified away by investing in both Color Star and CTS 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 Color Star and CTS into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Color Star Technology and CTS Corporation, you can compare the effects of market volatilities on Color Star and CTS 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 Color Star with a short position of CTS. Check out your portfolio center. Please also check ongoing floating volatility patterns of Color Star and CTS.
Diversification Opportunities for Color Star and CTS
-0.53 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Color and CTS is -0.53. Overlapping area represents the amount of risk that can be diversified away by holding Color Star Technology and CTS Corp. in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on CTS Corporation and Color Star 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 Color Star Technology are associated (or correlated) with CTS. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of CTS Corporation has no effect on the direction of Color Star i.e., Color Star and CTS go up and down completely randomly.
Pair Corralation between Color Star and CTS
Considering the 90-day investment horizon Color Star Technology is expected to under-perform the CTS. In addition to that, Color Star is 3.93 times more volatile than CTS Corporation. It trades about -0.42 of its total potential returns per unit of risk. CTS Corporation is currently generating about 0.14 per unit of volatility. If you would invest 4,973 in CTS Corporation on August 30, 2024 and sell it today you would earn a total of 473.00 from holding CTS Corporation or generate 9.51% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 95.65% |
| Values | Daily Returns |
Color Star Technology vs. CTS Corp.
Performance |
| Timeline |
| Color Star Technology |
| CTS Corporation |
Color Star and CTS Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Color Star and CTS
The main advantage of trading using opposite Color Star and CTS positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Color Star position performs unexpectedly, CTS 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 will offset losses from the drop in CTS's long position.| Color Star vs. Guild Esports Plc | Color Star vs. New Wave Holdings | Color Star vs. Network Media Group | Color Star vs. Hall of Fame |
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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