Correlation Between CTT Correios and INDCOMMBK CHINA
Can any of the company-specific risk be diversified away by investing in both CTT Correios and INDCOMMBK CHINA 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 Correios and INDCOMMBK CHINA into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between CTT Correios and INDCOMMBK CHINA ADR20, you can compare the effects of market volatilities on CTT Correios and INDCOMMBK CHINA 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 Correios with a short position of INDCOMMBK CHINA. Check out your portfolio center. Please also check ongoing floating volatility patterns of CTT Correios and INDCOMMBK CHINA.
Diversification Opportunities for CTT Correios and INDCOMMBK CHINA
0.94 | Correlation Coefficient |
Almost no diversification
The 3 months correlation between CTT and INDCOMMBK is 0.94. Overlapping area represents the amount of risk that can be diversified away by holding CTT Correios and INDCOMMBK CHINA ADR20 in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on INDCOMMBK CHINA ADR20 and CTT Correios 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 INDCOMMBK CHINA. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of INDCOMMBK CHINA ADR20 has no effect on the direction of CTT Correios i.e., CTT Correios and INDCOMMBK CHINA go up and down completely randomly.
Pair Corralation between CTT Correios and INDCOMMBK CHINA
Assuming the 90 days horizon CTT Correios is expected to generate 1.33 times less return on investment than INDCOMMBK CHINA. But when comparing it to its historical volatility, CTT Correios is 1.41 times less risky than INDCOMMBK CHINA. It trades about 0.14 of its potential returns per unit of risk. INDCOMMBK CHINA ADR20 is currently generating about 0.14 of returns per unit of risk over similar time horizon. If you would invest 918.00 in INDCOMMBK CHINA ADR20 on November 2, 2024 and sell it today you would earn a total of 352.00 from holding INDCOMMBK CHINA ADR20 or generate 38.34% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
CTT Correios vs. INDCOMMBK CHINA ADR20
Performance |
| Timeline |
| CTT Correios |
| INDCOMMBK CHINA ADR20 |
CTT Correios and INDCOMMBK CHINA Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with CTT Correios and INDCOMMBK CHINA
The main advantage of trading using opposite CTT Correios and INDCOMMBK CHINA positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if CTT Correios position performs unexpectedly, INDCOMMBK CHINA 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 INDCOMMBK CHINA will offset losses from the drop in INDCOMMBK CHINA's long position.| CTT Correios vs. Check Point Software | CTT Correios vs. PKSHA TECHNOLOGY INC | CTT Correios vs. AECOM TECHNOLOGY | CTT Correios vs. VIRGIN WINES UK |
| INDCOMMBK CHINA vs. Industrial and Commercial | INDCOMMBK CHINA vs. CHINA BANK ADR20 | INDCOMMBK CHINA vs. AGRICULTBK HADR25 YC | INDCOMMBK CHINA vs. BANK OCHINA H |
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 Sync Your Broker module to sync your existing holdings, watchlists, positions or portfolios from thousands of online brokerage services, banks, investment account aggregators and robo-advisors..
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