Correlation Between CTT - and Dow Jones
Can any of the company-specific risk be diversified away by investing in both CTT - and Dow Jones 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 CTT - and Dow Jones into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between CTT Correios and Dow Jones Industrial, you can compare the effects of market volatilities on CTT - and Dow Jones 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 CTT - with a short position of Dow Jones. Check out your portfolio center. Please also check ongoing floating volatility patterns of CTT - and Dow Jones.
Diversification Opportunities for CTT - and Dow Jones
Good diversification
The 3 months correlation between CTT and Dow is -0.15. Overlapping area represents the amount of risk that can be diversified away by holding CTT Correios and Dow Jones Industrial in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Dow Jones Industrial and CTT - 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 CTT Correios are associated (or correlated) with Dow Jones. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Dow Jones Industrial has no effect on the direction of CTT - i.e., CTT - and Dow Jones go up and down completely randomly.
Pair Corralation between CTT - and Dow Jones
Assuming the 90 days horizon CTT Correios is expected to generate 2.48 times more return on investment than Dow Jones. However, CTT - is 2.48 times more volatile than Dow Jones Industrial. It trades about 0.09 of its potential returns per unit of risk. Dow Jones Industrial is currently generating about 0.09 per unit of risk. If you would invest 318.00 in CTT Correios on October 16, 2024 and sell it today you would earn a total of 212.00 from holding CTT Correios or generate 66.67% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 99.15% |
| Values | Daily Returns |
CTT Correios vs. Dow Jones Industrial
Performance |
| Timeline |
CTT - and Dow Jones Volatility Contrast
Predicted Return Density |
| Returns |
CTT Correios
Pair trading matchups for CTT -
Dow Jones Industrial
Pair trading matchups for Dow Jones
Pair Trading with CTT - and Dow Jones
The main advantage of trading using opposite CTT - and Dow Jones positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if CTT - position performs unexpectedly, Dow Jones 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 Dow Jones will offset losses from the drop in Dow Jones' long position.| CTT - vs. QBE Insurance Group | CTT - vs. China Reinsurance | CTT - vs. Tower Semiconductor | CTT - vs. Universal Insurance Holdings |
| Dow Jones vs. Gfl Environmental Holdings | Dow Jones vs. Lizhan Environmental | Dow Jones vs. Grupo Simec SAB | Dow Jones vs. Constellation Brands Class |
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 Fundamentals Comparison module to compare fundamentals across multiple equities to find investing opportunities.
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