Correlation Between NOS SGPS and CTT Correios
Can any of the company-specific risk be diversified away by investing in both NOS SGPS and CTT Correios 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 NOS SGPS and CTT Correios into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between NOS SGPS SA and CTT Correios de, you can compare the effects of market volatilities on NOS SGPS and CTT Correios 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 NOS SGPS with a short position of CTT Correios. Check out your portfolio center. Please also check ongoing floating volatility patterns of NOS SGPS and CTT Correios.
Diversification Opportunities for NOS SGPS and CTT Correios
-0.09 | Correlation Coefficient |
Good diversification
The 3 months correlation between NOS and CTT is -0.09. Overlapping area represents the amount of risk that can be diversified away by holding NOS SGPS SA and CTT Correios de in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on CTT Correios de and NOS SGPS 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 NOS SGPS SA are associated (or correlated) with CTT Correios. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of CTT Correios de has no effect on the direction of NOS SGPS i.e., NOS SGPS and CTT Correios go up and down completely randomly.
Pair Corralation between NOS SGPS and CTT Correios
Assuming the 90 days trading horizon NOS SGPS SA is expected to under-perform the CTT Correios. In addition to that, NOS SGPS is 1.42 times more volatile than CTT Correios de. It trades about -0.05 of its total potential returns per unit of risk. CTT Correios de is currently generating about 0.21 per unit of volatility. If you would invest 428.00 in CTT Correios de on September 1, 2024 and sell it today you would earn a total of 19.00 from holding CTT Correios de or generate 4.44% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 95.65% |
| Values | Daily Returns |
NOS SGPS SA vs. CTT Correios de
Performance |
| Timeline |
| NOS SGPS SA |
| CTT Correios de |
NOS SGPS and CTT Correios Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with NOS SGPS and CTT Correios
The main advantage of trading using opposite NOS SGPS and CTT Correios positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if NOS SGPS position performs unexpectedly, CTT Correios 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 CTT Correios will offset losses from the drop in CTT Correios' long position.| NOS SGPS vs. Sonae SGPS SA | NOS SGPS vs. The Navigator | NOS SGPS vs. Galp Energia SGPS | NOS SGPS vs. REN Redes |
| CTT Correios vs. Banco Comercial Portugues | CTT Correios vs. Sonae SGPS SA | CTT Correios vs. Galp Energia SGPS | CTT Correios vs. NOS SGPS SA |
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 Money Managers module to screen money managers from public funds and ETFs managed around the world.
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