Correlation Between Bergman Beving and CTT Systems
Can any of the company-specific risk be diversified away by investing in both Bergman Beving and CTT Systems 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 Bergman Beving and CTT Systems into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Bergman Beving AB and CTT Systems AB, you can compare the effects of market volatilities on Bergman Beving and CTT Systems 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 Bergman Beving with a short position of CTT Systems. Check out your portfolio center. Please also check ongoing floating volatility patterns of Bergman Beving and CTT Systems.
Diversification Opportunities for Bergman Beving and CTT Systems
0.04 | Correlation Coefficient |
Significant diversification
The 3 months correlation between Bergman and CTT is 0.04. Overlapping area represents the amount of risk that can be diversified away by holding Bergman Beving AB and CTT Systems AB in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on CTT Systems AB and Bergman Beving 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 Bergman Beving AB are associated (or correlated) with CTT Systems. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of CTT Systems AB has no effect on the direction of Bergman Beving i.e., Bergman Beving and CTT Systems go up and down completely randomly.
Pair Corralation between Bergman Beving and CTT Systems
Assuming the 90 days trading horizon Bergman Beving AB is expected to under-perform the CTT Systems. But the stock apears to be less risky and, when comparing its historical volatility, Bergman Beving AB is 1.03 times less risky than CTT Systems. The stock trades about -0.07 of its potential returns per unit of risk. The CTT Systems AB is currently generating about 0.2 of returns per unit of risk over similar time horizon. If you would invest 24,200 in CTT Systems AB on September 4, 2024 and sell it today you would earn a total of 2,300 from holding CTT Systems AB or generate 9.5% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Bergman Beving AB vs. CTT Systems AB
Performance |
| Timeline |
| Bergman Beving AB |
| CTT Systems AB |
Bergman Beving and CTT Systems Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Bergman Beving and CTT Systems
The main advantage of trading using opposite Bergman Beving and CTT Systems positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Bergman Beving position performs unexpectedly, CTT Systems 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 CTT Systems will offset losses from the drop in CTT Systems' long position.| Bergman Beving vs. Lagercrantz Group AB | Bergman Beving vs. Addtech AB | Bergman Beving vs. AddLife AB | Bergman Beving vs. Bufab Holding AB |
| CTT Systems vs. Enea AB | CTT Systems vs. BTS Group AB | CTT Systems vs. CellaVision AB | CTT Systems vs. Biotage AB |
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 AI Portfolio Architect module to use AI to generate optimal portfolios and find profitable investment opportunities.
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