Correlation Between CTS and IShares MSCI
Can any of the company-specific risk be diversified away by investing in both CTS and IShares MSCI 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 CTS and IShares MSCI into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between CTS Corporation and iShares MSCI, you can compare the effects of market volatilities on CTS and IShares MSCI 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 CTS with a short position of IShares MSCI. Check out your portfolio center. Please also check ongoing floating volatility patterns of CTS and IShares MSCI.
Diversification Opportunities for CTS and IShares MSCI
0.0 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between CTS and IShares is 0.0. Overlapping area represents the amount of risk that can be diversified away by holding CTS Corp. and iShares MSCI in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on iShares MSCI and CTS 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 CTS Corporation are associated (or correlated) with IShares MSCI. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of iShares MSCI has no effect on the direction of CTS i.e., CTS and IShares MSCI go up and down completely randomly.
Pair Corralation between CTS and IShares MSCI
Considering the 90-day investment horizon CTS Corporation is expected to generate 3.85 times more return on investment than IShares MSCI. However, CTS is 3.85 times more volatile than iShares MSCI. It trades about 0.08 of its potential returns per unit of risk. iShares MSCI is currently generating about 0.08 per unit of risk. If you would invest 3,917 in CTS Corporation on September 14, 2024 and sell it today you would earn a total of 1,729 from holding CTS Corporation or generate 44.14% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Flat |
| Strength | Insignificant |
| Accuracy | 99.63% |
| Values | Daily Returns |
CTS Corp. vs. iShares MSCI
Performance |
| Timeline |
| CTS Corporation |
| iShares MSCI |
CTS and IShares MSCI Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with CTS and IShares MSCI
The main advantage of trading using opposite CTS and IShares MSCI positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if CTS position performs unexpectedly, IShares MSCI 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 IShares MSCI will offset losses from the drop in IShares MSCI's long position.The idea behind CTS Corporation and iShares MSCI 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.| IShares MSCI vs. NetEase | IShares MSCI vs. CTS Corporation | IShares MSCI vs. ClearOne | IShares MSCI vs. Celestica |
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 Dashboard module to portfolio dashboard that provides centralized access to all your investments.
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