Correlation Between CTT Systems and DORO AB
Can any of the company-specific risk be diversified away by investing in both CTT Systems and DORO AB 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 DORO AB 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 DORO AB, you can compare the effects of market volatilities on CTT Systems and DORO AB 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 DORO AB. Check out your portfolio center. Please also check ongoing floating volatility patterns of CTT Systems and DORO AB.
Diversification Opportunities for CTT Systems and DORO AB
-0.65 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between CTT and DORO is -0.65. Overlapping area represents the amount of risk that can be diversified away by holding CTT Systems AB and DORO AB in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on DORO 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 DORO AB. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of DORO AB has no effect on the direction of CTT Systems i.e., CTT Systems and DORO AB go up and down completely randomly.
Pair Corralation between CTT Systems and DORO AB
Assuming the 90 days trading horizon CTT Systems is expected to generate 2.86 times less return on investment than DORO AB. But when comparing it to its historical volatility, CTT Systems AB is 1.47 times less risky than DORO AB. It trades about 0.04 of its potential returns per unit of risk. DORO AB is currently generating about 0.08 of returns per unit of risk over similar time horizon. If you would invest 1,887 in DORO AB on September 3, 2024 and sell it today you would earn a total of 1,353 from holding DORO AB or generate 71.7% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
CTT Systems AB vs. DORO AB
Performance |
| Timeline |
| CTT Systems AB |
| DORO AB |
CTT Systems and DORO AB Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with CTT Systems and DORO AB
The main advantage of trading using opposite CTT Systems and DORO AB positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if CTT Systems position performs unexpectedly, DORO AB 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 DORO AB will offset losses from the drop in DORO AB's long position.| CTT Systems vs. Enea AB | CTT Systems vs. BTS Group AB | CTT Systems vs. CellaVision AB | CTT Systems vs. Biotage AB |
| DORO AB vs. Bredband2 i Skandinavien | DORO AB vs. Enea AB | DORO AB vs. Know IT AB | DORO AB vs. CellaVision 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 Odds Of Bankruptcy module to get analysis of equity chance of financial distress in the next 2 years.
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