Correlation Between CTS and Santech Holdings
Can any of the company-specific risk be diversified away by investing in both CTS and Santech Holdings 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 Santech Holdings into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between CTS Corporation and Santech Holdings Limited, you can compare the effects of market volatilities on CTS and Santech Holdings 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 Santech Holdings. Check out your portfolio center. Please also check ongoing floating volatility patterns of CTS and Santech Holdings.
Diversification Opportunities for CTS and Santech Holdings
0.49 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between CTS and Santech is 0.49. Overlapping area represents the amount of risk that can be diversified away by holding CTS Corp. and Santech Holdings Limited in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Santech Holdings 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 Santech Holdings. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Santech Holdings has no effect on the direction of CTS i.e., CTS and Santech Holdings go up and down completely randomly.
Pair Corralation between CTS and Santech Holdings
Considering the 90-day investment horizon CTS Corporation is expected to generate 0.15 times more return on investment than Santech Holdings. However, CTS Corporation is 6.64 times less risky than Santech Holdings. It trades about -0.18 of its potential returns per unit of risk. Santech Holdings Limited is currently generating about -0.06 per unit of risk. If you would invest 5,793 in CTS Corporation on November 8, 2024 and sell it today you would lose (1,035) from holding CTS Corporation or give up 17.87% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
CTS Corp. vs. Santech Holdings Limited
Performance |
| Timeline |
| CTS Corporation |
| Santech Holdings |
CTS and Santech Holdings Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with CTS and Santech Holdings
The main advantage of trading using opposite CTS and Santech Holdings positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if CTS position performs unexpectedly, Santech Holdings 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 Santech Holdings will offset losses from the drop in Santech Holdings' long position.The idea behind CTS Corporation and Santech Holdings Limited 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.| Santech Holdings vs. Western Asset Investment | Santech Holdings vs. BorgWarner | Santech Holdings vs. FDG Electric Vehicles | Santech Holdings vs. Adient PLC |
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 Volatility Analysis module to get historical volatility and risk analysis based on latest market data.
Other Complementary Tools
| Portfolio Suggestion Get suggestions outside of your existing asset allocation including your own model portfolios | |
| Portfolio Anywhere Track or share privately all of your investments from the convenience of any device | |
| Earnings Calls Check upcoming earnings announcements updated hourly across public exchanges | |
| Companies Directory Evaluate performance of over 100,000 Stocks, Funds, and ETFs against different fundamentals | |
| Sync Your Broker Sync your existing holdings, watchlists, positions or portfolios from thousands of online brokerage services, banks, investment account aggregators and robo-advisors. |