Correlation Between Littelfuse and CTS
Can any of the company-specific risk be diversified away by investing in both Littelfuse and CTS 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 Littelfuse and CTS into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Littelfuse and CTS Corporation, you can compare the effects of market volatilities on Littelfuse and CTS 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 Littelfuse with a short position of CTS. Check out your portfolio center. Please also check ongoing floating volatility patterns of Littelfuse and CTS.
Diversification Opportunities for Littelfuse and CTS
-0.22 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Littelfuse and CTS is -0.22. Overlapping area represents the amount of risk that can be diversified away by holding Littelfuse and CTS Corp. in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on CTS Corporation and Littelfuse 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 Littelfuse are associated (or correlated) with CTS. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of CTS Corporation has no effect on the direction of Littelfuse i.e., Littelfuse and CTS go up and down completely randomly.
Pair Corralation between Littelfuse and CTS
Given the investment horizon of 90 days Littelfuse is expected to generate 3.09 times less return on investment than CTS. But when comparing it to its historical volatility, Littelfuse is 1.15 times less risky than CTS. It trades about 0.01 of its potential returns per unit of risk. CTS Corporation is currently generating about 0.02 of returns per unit of risk over similar time horizon. If you would invest 5,290 in CTS Corporation on September 2, 2024 and sell it today you would earn a total of 201.00 from holding CTS Corporation or generate 3.8% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Littelfuse vs. CTS Corp.
Performance |
| Timeline |
| Littelfuse |
| CTS Corporation |
Littelfuse and CTS Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Littelfuse and CTS
The main advantage of trading using opposite Littelfuse and CTS positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Littelfuse position performs unexpectedly, CTS 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 CTS will offset losses from the drop in CTS's long position.| Littelfuse vs. Knowles Cor | Littelfuse vs. Ubiquiti Networks | Littelfuse vs. AmpliTech Group | Littelfuse vs. Viavi Solutions |
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.
Other Complementary Tools
| Watchlist Optimization Optimize watchlists to build efficient portfolios or rebalance existing positions based on the mean-variance optimization algorithm | |
| Price Transformation Use Price Transformation models to analyze the depth of different equity instruments across global markets | |
| Portfolio Rebalancing Analyze risk-adjusted returns against different time horizons to find asset-allocation targets | |
| FinTech Suite Use AI to screen and filter profitable investment opportunities | |
| Theme Ratings Determine theme ratings based on digital equity recommendations. Macroaxis theme ratings are based on combination of fundamental analysis and risk-adjusted market performance |