Correlation Between A1 and CTR Investments
Can any of the company-specific risk be diversified away by investing in both A1 and CTR Investments 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 A1 and CTR Investments into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between A1 Group and CTR Investments Consulting, you can compare the effects of market volatilities on A1 and CTR Investments 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 A1 with a short position of CTR Investments. Check out your portfolio center. Please also check ongoing floating volatility patterns of A1 and CTR Investments.
Diversification Opportunities for A1 and CTR Investments
0.65 | Correlation Coefficient |
Poor diversification
The 3 months correlation between A1 and CTR is 0.65. Overlapping area represents the amount of risk that can be diversified away by holding A1 Group and CTR Investments Consulting in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on CTR Investments Cons and A1 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 A1 Group are associated (or correlated) with CTR Investments. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of CTR Investments Cons has no effect on the direction of A1 i.e., A1 and CTR Investments go up and down completely randomly.
Pair Corralation between A1 and CTR Investments
Given the investment horizon of 90 days A1 Group is expected to generate 1.48 times more return on investment than CTR Investments. However, A1 is 1.48 times more volatile than CTR Investments Consulting. It trades about -0.07 of its potential returns per unit of risk. CTR Investments Consulting is currently generating about -0.2 per unit of risk. If you would invest 0.57 in A1 Group on September 1, 2024 and sell it today you would lose (0.36) from holding A1 Group or give up 63.16% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
A1 Group vs. CTR Investments Consulting
Performance |
| Timeline |
| A1 Group |
| CTR Investments Cons |
A1 and CTR Investments Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with A1 and CTR Investments
The main advantage of trading using opposite A1 and CTR Investments positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if A1 position performs unexpectedly, CTR Investments 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 CTR Investments will offset losses from the drop in CTR Investments' long position.The idea behind A1 Group and CTR Investments Consulting 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.| CTR Investments vs. American Leisure Holdings | CTR Investments vs. Absolute Health and | CTR Investments vs. Supurva Healthcare Group | CTR Investments vs. Alpha Wastewater |
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 Sign In To Macroaxis module to sign in to explore Macroaxis' wealth optimization platform and fintech modules.
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