Correlation Between CTT Systems and Bergman Beving
Can any of the company-specific risk be diversified away by investing in both CTT Systems and Bergman Beving 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 Systems and Bergman Beving into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between CTT Systems AB and Bergman Beving AB, you can compare the effects of market volatilities on CTT Systems and Bergman Beving 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 Systems with a short position of Bergman Beving. Check out your portfolio center. Please also check ongoing floating volatility patterns of CTT Systems and Bergman Beving.
Diversification Opportunities for CTT Systems and Bergman Beving
0.04 | Correlation Coefficient |
Significant diversification
The 3 months correlation between CTT and Bergman is 0.04. Overlapping area represents the amount of risk that can be diversified away by holding CTT Systems AB and Bergman Beving AB in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Bergman Beving AB and CTT Systems 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 Systems AB are associated (or correlated) with Bergman Beving. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Bergman Beving AB has no effect on the direction of CTT Systems i.e., CTT Systems and Bergman Beving go up and down completely randomly.
Pair Corralation between CTT Systems and Bergman Beving
Assuming the 90 days trading horizon CTT Systems AB is expected to generate 1.03 times more return on investment than Bergman Beving. However, CTT Systems is 1.03 times more volatile than Bergman Beving AB. It trades about 0.2 of its potential returns per unit of risk. Bergman Beving AB is currently generating about -0.07 per unit of risk. If you would invest 24,200 in CTT Systems AB on September 4, 2024 and sell it today you would earn a total of 2,300 from holding CTT Systems AB or generate 9.5% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
CTT Systems AB vs. Bergman Beving AB
Performance |
| Timeline |
| CTT Systems AB |
| Bergman Beving AB |
CTT Systems and Bergman Beving Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with CTT Systems and Bergman Beving
The main advantage of trading using opposite CTT Systems and Bergman Beving positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if CTT Systems position performs unexpectedly, Bergman Beving 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 Bergman Beving will offset losses from the drop in Bergman Beving's long position.| CTT Systems vs. Enea AB | CTT Systems vs. BTS Group AB | CTT Systems vs. CellaVision AB | CTT Systems vs. Biotage AB |
| Bergman Beving vs. Lagercrantz Group AB | Bergman Beving vs. Addtech AB | Bergman Beving vs. AddLife AB | Bergman Beving vs. Bufab Holding AB |
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 Price Transformation module to use Price Transformation models to analyze the depth of different equity instruments across global markets.
Other Complementary Tools
| Stocks Directory Find actively traded stocks across global markets | |
| Insider Screener Find insiders across different sectors to evaluate their impact on performance | |
| Portfolio Center All portfolio management and optimization tools to improve performance of your portfolios | |
| Idea Optimizer Use advanced portfolio builder with pre-computed micro ideas to build optimal portfolio | |
| Funds Screener Find actively-traded funds from around the world traded on over 30 global exchanges |