Correlation Between CTT Systems and CAG Group
Can any of the company-specific risk be diversified away by investing in both CTT Systems and CAG Group 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 CAG Group 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 CAG Group AB, you can compare the effects of market volatilities on CTT Systems and CAG Group 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 CAG Group. Check out your portfolio center. Please also check ongoing floating volatility patterns of CTT Systems and CAG Group.
Diversification Opportunities for CTT Systems and CAG Group
0.03 | Correlation Coefficient |
Significant diversification
The 3 months correlation between CTT and CAG is 0.03. Overlapping area represents the amount of risk that can be diversified away by holding CTT Systems AB and CAG Group AB in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on CAG Group 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 CAG Group. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of CAG Group AB has no effect on the direction of CTT Systems i.e., CTT Systems and CAG Group go up and down completely randomly.
Pair Corralation between CTT Systems and CAG Group
Assuming the 90 days trading horizon CTT Systems AB is expected to generate 2.57 times more return on investment than CAG Group. However, CTT Systems is 2.57 times more volatile than CAG Group AB. It trades about 0.17 of its potential returns per unit of risk. CAG Group AB is currently generating about 0.0 per unit of risk. If you would invest 25,500 in CTT Systems AB on September 24, 2024 and sell it today you would earn a total of 1,800 from holding CTT Systems AB or generate 7.06% 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. CAG Group AB
Performance |
| Timeline |
| CTT Systems AB |
| CAG Group AB |
CTT Systems and CAG Group Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with CTT Systems and CAG Group
The main advantage of trading using opposite CTT Systems and CAG Group positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if CTT Systems position performs unexpectedly, CAG Group 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 CAG Group will offset losses from the drop in CAG Group's long position.| CTT Systems vs. AroCell AB | CTT Systems vs. aXichem AB | CTT Systems vs. Gaming Corps AB | CTT Systems vs. Cantargia AB |
| CAG Group vs. Avensia publ AB | CAG Group vs. DevPort AB | CAG Group vs. B3 Consulting Group | CAG Group vs. Micro Systemation 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 USA ETFs module to find actively traded Exchange Traded Funds (ETF) in USA.
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