Correlation Between CTS Eventim and Highlight Communications
Can any of the company-specific risk be diversified away by investing in both CTS Eventim and Highlight Communications 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 CTS Eventim and Highlight Communications into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between CTS Eventim AG and Highlight Communications AG, you can compare the effects of market volatilities on CTS Eventim and Highlight Communications 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 CTS Eventim with a short position of Highlight Communications. Check out your portfolio center. Please also check ongoing floating volatility patterns of CTS Eventim and Highlight Communications.
Diversification Opportunities for CTS Eventim and Highlight Communications
-0.58 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between CTS and Highlight is -0.58. Overlapping area represents the amount of risk that can be diversified away by holding CTS Eventim AG and Highlight Communications AG in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Highlight Communications and CTS Eventim 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 CTS Eventim AG are associated (or correlated) with Highlight Communications. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Highlight Communications has no effect on the direction of CTS Eventim i.e., CTS Eventim and Highlight Communications go up and down completely randomly.
Pair Corralation between CTS Eventim and Highlight Communications
Assuming the 90 days trading horizon CTS Eventim AG is expected to generate 0.51 times more return on investment than Highlight Communications. However, CTS Eventim AG is 1.97 times less risky than Highlight Communications. It trades about -0.02 of its potential returns per unit of risk. Highlight Communications AG is currently generating about -0.08 per unit of risk. If you would invest 8,725 in CTS Eventim AG on September 3, 2024 and sell it today you would lose (370.00) from holding CTS Eventim AG or give up 4.24% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
CTS Eventim AG vs. Highlight Communications AG
Performance |
| Timeline |
| CTS Eventim AG |
| Highlight Communications |
CTS Eventim and Highlight Communications Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with CTS Eventim and Highlight Communications
The main advantage of trading using opposite CTS Eventim and Highlight Communications positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if CTS Eventim position performs unexpectedly, Highlight Communications 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 Highlight Communications will offset losses from the drop in Highlight Communications' long position.| CTS Eventim vs. Chesapeake Utilities | CTS Eventim vs. Tencent Music Entertainment | CTS Eventim vs. United Utilities Group | CTS Eventim vs. Warner Music Group |
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 Portfolio Holdings module to check your current holdings and cash postion to detemine if your portfolio needs rebalancing.
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