Correlation Between CTT Systems and Exsitec Holding
Can any of the company-specific risk be diversified away by investing in both CTT Systems and Exsitec Holding 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 Exsitec Holding 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 Exsitec Holding AB, you can compare the effects of market volatilities on CTT Systems and Exsitec Holding 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 Exsitec Holding. Check out your portfolio center. Please also check ongoing floating volatility patterns of CTT Systems and Exsitec Holding.
Diversification Opportunities for CTT Systems and Exsitec Holding
0.29 | Correlation Coefficient |
Modest diversification
The 3 months correlation between CTT and Exsitec is 0.29. Overlapping area represents the amount of risk that can be diversified away by holding CTT Systems AB and Exsitec Holding AB in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Exsitec Holding 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 Exsitec Holding. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Exsitec Holding AB has no effect on the direction of CTT Systems i.e., CTT Systems and Exsitec Holding go up and down completely randomly.
Pair Corralation between CTT Systems and Exsitec Holding
Assuming the 90 days trading horizon CTT Systems AB is expected to generate 1.07 times more return on investment than Exsitec Holding. However, CTT Systems is 1.07 times more volatile than Exsitec Holding AB. It trades about 0.17 of its potential returns per unit of risk. Exsitec Holding AB is currently generating about -0.05 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 | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
CTT Systems AB vs. Exsitec Holding AB
Performance |
| Timeline |
| CTT Systems AB |
| Exsitec Holding AB |
CTT Systems and Exsitec Holding Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with CTT Systems and Exsitec Holding
The main advantage of trading using opposite CTT Systems and Exsitec Holding positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if CTT Systems position performs unexpectedly, Exsitec Holding 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 Exsitec Holding will offset losses from the drop in Exsitec Holding's long position.| CTT Systems vs. AroCell AB | CTT Systems vs. aXichem AB | CTT Systems vs. Gaming Corps AB | CTT Systems vs. Cantargia AB |
| Exsitec Holding vs. FormPipe Software AB | Exsitec Holding vs. Micro Systemation AB | Exsitec Holding vs. CTT Systems AB | Exsitec Holding vs. CAG Group 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 Watchlist Optimization module to optimize watchlists to build efficient portfolios or rebalance existing positions based on the mean-variance optimization algorithm.
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