Correlation Between CTT Systems and EWork Group
Can any of the company-specific risk be diversified away by investing in both CTT Systems and EWork 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 EWork 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 eWork Group AB, you can compare the effects of market volatilities on CTT Systems and EWork 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 EWork Group. Check out your portfolio center. Please also check ongoing floating volatility patterns of CTT Systems and EWork Group.
Diversification Opportunities for CTT Systems and EWork Group
0.21 | Correlation Coefficient |
Modest diversification
The 3 months correlation between CTT and EWork is 0.21. Overlapping area represents the amount of risk that can be diversified away by holding CTT Systems AB and eWork Group AB in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on eWork 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 EWork Group. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of eWork Group AB has no effect on the direction of CTT Systems i.e., CTT Systems and EWork Group go up and down completely randomly.
Pair Corralation between CTT Systems and EWork Group
Assuming the 90 days trading horizon CTT Systems AB is expected to generate 3.17 times more return on investment than EWork Group. However, CTT Systems is 3.17 times more volatile than eWork Group AB. It trades about 0.2 of its potential returns per unit of risk. eWork Group 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 | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
CTT Systems AB vs. eWork Group AB
Performance |
| Timeline |
| CTT Systems AB |
| eWork Group AB |
CTT Systems and EWork Group Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with CTT Systems and EWork Group
The main advantage of trading using opposite CTT Systems and EWork Group positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if CTT Systems position performs unexpectedly, EWork 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 EWork Group will offset losses from the drop in EWork Group's long position.| CTT Systems vs. Enea AB | CTT Systems vs. BTS Group AB | CTT Systems vs. CellaVision AB | CTT Systems vs. Biotage AB |
| EWork Group vs. Softronic AB | EWork Group vs. Proact IT Group | EWork Group vs. Inwido AB | EWork Group vs. NOTE 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 Bond Analysis module to evaluate and analyze corporate bonds as a potential investment for your portfolios..
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