Correlation Between CTS Eventim and Sekisui Chemical
Can any of the company-specific risk be diversified away by investing in both CTS Eventim and Sekisui Chemical 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 Sekisui Chemical 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 Sekisui Chemical Co, you can compare the effects of market volatilities on CTS Eventim and Sekisui Chemical 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 Sekisui Chemical. Check out your portfolio center. Please also check ongoing floating volatility patterns of CTS Eventim and Sekisui Chemical.
Diversification Opportunities for CTS Eventim and Sekisui Chemical
-0.66 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between CTS and Sekisui is -0.66. Overlapping area represents the amount of risk that can be diversified away by holding CTS Eventim AG and Sekisui Chemical Co in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Sekisui Chemical 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 Sekisui Chemical. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Sekisui Chemical has no effect on the direction of CTS Eventim i.e., CTS Eventim and Sekisui Chemical go up and down completely randomly.
Pair Corralation between CTS Eventim and Sekisui Chemical
Assuming the 90 days trading horizon CTS Eventim AG is expected to generate 1.1 times more return on investment than Sekisui Chemical. However, CTS Eventim is 1.1 times more volatile than Sekisui Chemical Co. It trades about 0.05 of its potential returns per unit of risk. Sekisui Chemical Co is currently generating about 0.03 per unit of risk. If you would invest 5,953 in CTS Eventim AG on September 5, 2024 and sell it today you would earn a total of 2,712 from holding CTS Eventim AG or generate 45.56% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
CTS Eventim AG vs. Sekisui Chemical Co
Performance |
| Timeline |
| CTS Eventim AG |
| Sekisui Chemical |
CTS Eventim and Sekisui Chemical Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with CTS Eventim and Sekisui Chemical
The main advantage of trading using opposite CTS Eventim and Sekisui Chemical positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if CTS Eventim position performs unexpectedly, Sekisui Chemical 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 Sekisui Chemical will offset losses from the drop in Sekisui Chemical's long position.| CTS Eventim vs. SK TELECOM TDADR | CTS Eventim vs. Ribbon Communications | CTS Eventim vs. American Homes 4 | CTS Eventim vs. Consolidated Communications Holdings |
| Sekisui Chemical vs. Martin Marietta Materials | Sekisui Chemical vs. Mitsubishi Materials | Sekisui Chemical vs. EAGLE MATERIALS | Sekisui Chemical vs. Applied Materials |
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 CEOs Directory module to screen CEOs from public companies around the world.
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