Correlation Between CTT - and ASPEN TECHINC
Can any of the company-specific risk be diversified away by investing in both CTT - and ASPEN TECHINC 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 ASPEN TECHINC into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between CTT Correios and ASPEN TECHINC DL, you can compare the effects of market volatilities on CTT - and ASPEN TECHINC 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 ASPEN TECHINC. Check out your portfolio center. Please also check ongoing floating volatility patterns of CTT - and ASPEN TECHINC.
Diversification Opportunities for CTT - and ASPEN TECHINC
0.74 | Correlation Coefficient |
Poor diversification
The 3 months correlation between CTT and ASPEN is 0.74. Overlapping area represents the amount of risk that can be diversified away by holding CTT Correios and ASPEN TECHINC DL in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on ASPEN TECHINC DL 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 ASPEN TECHINC. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of ASPEN TECHINC DL has no effect on the direction of CTT - i.e., CTT - and ASPEN TECHINC go up and down completely randomly.
Pair Corralation between CTT - and ASPEN TECHINC
Assuming the 90 days horizon CTT Correios is expected to generate 5.42 times more return on investment than ASPEN TECHINC. However, CTT - is 5.42 times more volatile than ASPEN TECHINC DL. It trades about 0.29 of its potential returns per unit of risk. ASPEN TECHINC DL is currently generating about 0.17 per unit of risk. If you would invest 461.00 in CTT Correios on October 20, 2024 and sell it today you would earn a total of 76.00 from holding CTT Correios or generate 16.49% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
CTT Correios vs. ASPEN TECHINC DL
Performance |
| Timeline |
| CTT Correios |
| ASPEN TECHINC DL |
CTT - and ASPEN TECHINC Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with CTT - and ASPEN TECHINC
The main advantage of trading using opposite CTT - and ASPEN TECHINC positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if CTT - position performs unexpectedly, ASPEN TECHINC 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 ASPEN TECHINC will offset losses from the drop in ASPEN TECHINC's long position.| CTT - vs. United Parcel Service | CTT - vs. Deutsche Post AG | CTT - vs. DSV Panalpina AS | CTT - vs. ZTO Express |
| ASPEN TECHINC vs. AEON METALS LTD | ASPEN TECHINC vs. Automatic Data Processing | ASPEN TECHINC vs. Nippon Light Metal | ASPEN TECHINC vs. China Datang |
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 Portfolio Volatility module to check portfolio volatility and analyze historical return density to properly model market risk.
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