Correlation Between CTT Correios and AFC Ajax
Can any of the company-specific risk be diversified away by investing in both CTT Correios and AFC Ajax 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 AFC Ajax into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between CTT Correios de and AFC Ajax NV, you can compare the effects of market volatilities on CTT Correios and AFC Ajax 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 AFC Ajax. Check out your portfolio center. Please also check ongoing floating volatility patterns of CTT Correios and AFC Ajax.
Diversification Opportunities for CTT Correios and AFC Ajax
0.51 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between CTT and AFC is 0.51. Overlapping area represents the amount of risk that can be diversified away by holding CTT Correios de and AFC Ajax NV in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on AFC Ajax NV 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 de are associated (or correlated) with AFC Ajax. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of AFC Ajax NV has no effect on the direction of CTT Correios i.e., CTT Correios and AFC Ajax go up and down completely randomly.
Pair Corralation between CTT Correios and AFC Ajax
Assuming the 90 days trading horizon CTT Correios de is expected to generate 1.26 times more return on investment than AFC Ajax. However, CTT Correios is 1.26 times more volatile than AFC Ajax NV. It trades about 0.03 of its potential returns per unit of risk. AFC Ajax NV is currently generating about -0.01 per unit of risk. If you would invest 439.00 in CTT Correios de on August 28, 2024 and sell it today you would earn a total of 6.00 from holding CTT Correios de or generate 1.37% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
CTT Correios de vs. AFC Ajax NV
Performance |
| Timeline |
| CTT Correios de |
| AFC Ajax NV |
CTT Correios and AFC Ajax Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with CTT Correios and AFC Ajax
The main advantage of trading using opposite CTT Correios and AFC Ajax positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if CTT Correios position performs unexpectedly, AFC Ajax 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 AFC Ajax will offset losses from the drop in AFC Ajax's long position.| CTT Correios vs. Banco Comercial Portugues | CTT Correios vs. Sonae SGPS SA | CTT Correios vs. Galp Energia SGPS | CTT Correios vs. NOS SGPS SA |
| AFC Ajax vs. Corbion NV | AFC Ajax vs. Allfunds Group | AFC Ajax vs. IMCD NV | AFC Ajax vs. BE Semiconductor Industries |
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 Share Portfolio module to track or share privately all of your investments from the convenience of any device.
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