Correlation Between CTT Correios and Futebol Clube
Can any of the company-specific risk be diversified away by investing in both CTT Correios and Futebol Clube 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 Futebol Clube 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 Futebol Clube do, you can compare the effects of market volatilities on CTT Correios and Futebol Clube 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 Futebol Clube. Check out your portfolio center. Please also check ongoing floating volatility patterns of CTT Correios and Futebol Clube.
Diversification Opportunities for CTT Correios and Futebol Clube
0.13 | Correlation Coefficient |
Average diversification
The 3 months correlation between CTT and Futebol is 0.13. Overlapping area represents the amount of risk that can be diversified away by holding CTT Correios de and Futebol Clube do in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Futebol Clube do 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 Futebol Clube. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Futebol Clube do has no effect on the direction of CTT Correios i.e., CTT Correios and Futebol Clube go up and down completely randomly.
Pair Corralation between CTT Correios and Futebol Clube
Assuming the 90 days trading horizon CTT Correios de is expected to generate 0.66 times more return on investment than Futebol Clube. However, CTT Correios de is 1.51 times less risky than Futebol Clube. It trades about 0.21 of its potential returns per unit of risk. Futebol Clube do is currently generating about -0.05 per unit of risk. If you would invest 418.00 in CTT Correios de on August 29, 2024 and sell it today you would earn a total of 27.00 from holding CTT Correios de or generate 6.46% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
CTT Correios de vs. Futebol Clube do
Performance |
| Timeline |
| CTT Correios de |
| Futebol Clube do |
CTT Correios and Futebol Clube Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with CTT Correios and Futebol Clube
The main advantage of trading using opposite CTT Correios and Futebol Clube positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if CTT Correios position performs unexpectedly, Futebol Clube 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 Futebol Clube will offset losses from the drop in Futebol Clube'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 |
| Futebol Clube vs. Benfica | Futebol Clube vs. Sporting Clube de | Futebol Clube vs. AFC Ajax NV | Futebol Clube vs. CTT Correios de |
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 Money Managers module to screen money managers from public funds and ETFs managed around the world.
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