Correlation Between CTT Systems and Firefly AB
Can any of the company-specific risk be diversified away by investing in both CTT Systems and Firefly 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 Firefly 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 Firefly AB, you can compare the effects of market volatilities on CTT Systems and Firefly 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 Firefly AB. Check out your portfolio center. Please also check ongoing floating volatility patterns of CTT Systems and Firefly AB.
Diversification Opportunities for CTT Systems and Firefly AB
-0.64 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between CTT and Firefly is -0.64. Overlapping area represents the amount of risk that can be diversified away by holding CTT Systems AB and Firefly AB in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Firefly 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 Firefly AB. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Firefly AB has no effect on the direction of CTT Systems i.e., CTT Systems and Firefly AB go up and down completely randomly.
Pair Corralation between CTT Systems and Firefly AB
Assuming the 90 days trading horizon CTT Systems AB is expected to generate 0.72 times more return on investment than Firefly AB. However, CTT Systems AB is 1.38 times less risky than Firefly AB. It trades about -0.03 of its potential returns per unit of risk. Firefly AB is currently generating about -0.14 per unit of risk. If you would invest 25,300 in CTT Systems AB on August 28, 2024 and sell it today you would lose (500.00) from holding CTT Systems AB or give up 1.98% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
CTT Systems AB vs. Firefly AB
Performance |
| Timeline |
| CTT Systems AB |
| Firefly AB |
CTT Systems and Firefly AB Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with CTT Systems and Firefly AB
The main advantage of trading using opposite CTT Systems and Firefly AB positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if CTT Systems position performs unexpectedly, Firefly 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 Firefly AB will offset losses from the drop in Firefly AB's long position.| CTT Systems vs. aXichem AB | CTT Systems vs. Gaming Corps AB | CTT Systems vs. Cantargia AB | CTT Systems vs. KABE Group AB |
| Firefly AB vs. Nordic Asia Investment | Firefly AB vs. Filo Mining Corp | Firefly AB vs. Vitec Software Group | Firefly AB vs. High Coast Distillery |
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 Crypto Correlations module to use cryptocurrency correlation module to diversify your cryptocurrency portfolio across multiple coins.
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