Correlation Between CTP NV and SEAZEN GROUP

Can any of the company-specific risk be diversified away by investing in both CTP NV and SEAZEN GROUP 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 CTP NV and SEAZEN GROUP into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between CTP NV EO and SEAZEN GROUP LTD, you can compare the effects of market volatilities on CTP NV and SEAZEN GROUP 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 CTP NV with a short position of SEAZEN GROUP. Check out your portfolio center. Please also check ongoing floating volatility patterns of CTP NV and SEAZEN GROUP.

Diversification Opportunities for CTP NV and SEAZEN GROUP

0.22

Correlation Coefficient

CTP NV  SEAZEN GROUP

Modest diversification

The 3 months correlation between CTP and SEAZEN is 0.22. Overlapping area represents the amount of risk that can be diversified away by holding CTP NV EO and SEAZEN GROUP LTD in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on SEAZEN GROUP LTD and CTP NV 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 CTP NV EO are associated (or correlated) with SEAZEN GROUP. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of SEAZEN GROUP LTD has no effect on the direction of CTP NV i.e., CTP NV and SEAZEN GROUP go up and down completely randomly.

Pair Corralation between CTP NV and SEAZEN GROUP

Assuming the 90 days horizon CTP NV EO is expected to generate 0.31 times more return on investment than SEAZEN GROUP. However, CTP NV EO is 3.23 times less risky than SEAZEN GROUP. It trades about -0.03 of its potential returns per unit of risk. SEAZEN GROUP LTD is currently generating about -0.09 per unit of risk. If you would invest  1,490  in CTP NV EO on September 23, 2024 and sell it today you would lose (12.00) from holding CTP NV EO or give up 0.81% of portfolio value over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Very Weak
Accuracy	100.0%
Values	Daily Returns

CTP NV EO  vs.  SEAZEN GROUP LTD

CTP NV EO

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days CTP NV EO has generated negative risk-adjusted returns adding no value to investors with long positions. Despite latest fragile performance, the Stock's basic indicators remain stable and the current disturbance on Wall Street may also be a sign of long-run gains for the company stockholders.

SEAZEN GROUP LTD

Risk-Adjusted Performance

6 of 100

Modest

Compared to the overall equity markets, risk-adjusted returns on investments in SEAZEN GROUP LTD are ranked lower than 6 (%) of all global equities and portfolios over the last 90 days. Despite nearly fragile essential indicators, SEAZEN GROUP reported solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with CTP NV and SEAZEN GROUP

The main advantage of trading using opposite CTP NV and SEAZEN GROUP positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if CTP NV position performs unexpectedly, SEAZEN GROUP 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 SEAZEN GROUP will offset losses from the drop in SEAZEN GROUP's long position.

The idea behind CTP NV EO and SEAZEN GROUP LTD pairs trading is to make the combined position market-neutral, meaning the overall market's direction will not affect its win or loss (or potential downside or upside). This can be achieved by designing a pairs trade with two highly correlated stocks or equities that operate in a similar space or sector, making it possible to obtain profits through simple and relatively low-risk investment.

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 Idea Breakdown module to analyze constituents of all Macroaxis ideas. Macroaxis investment ideas are predefined, sector-focused investing themes.