Correlation Between CTR Investments and A1

Can any of the company-specific risk be diversified away by investing in both CTR Investments and A1 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 CTR Investments and A1 into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between CTR Investments Consulting and A1 Group, you can compare the effects of market volatilities on CTR Investments and A1 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 CTR Investments with a short position of A1. Check out your portfolio center. Please also check ongoing floating volatility patterns of CTR Investments and A1.

Diversification Opportunities for CTR Investments and A1

0.76

Correlation Coefficient

CTR Investments  A1

Poor diversification

The 3 months correlation between CTR and A1 is 0.76. Overlapping area represents the amount of risk that can be diversified away by holding CTR Investments Consulting and A1 Group in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on A1 Group and CTR Investments 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 CTR Investments Consulting are associated (or correlated) with A1. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of A1 Group has no effect on the direction of CTR Investments i.e., CTR Investments and A1 go up and down completely randomly.

Pair Corralation between CTR Investments and A1

Given the investment horizon of 90 days CTR Investments Consulting is expected to generate 1.27 times more return on investment than A1. However, CTR Investments is 1.27 times more volatile than A1 Group. It trades about 0.07 of its potential returns per unit of risk. A1 Group is currently generating about 0.07 per unit of risk. If you would invest  0.10  in CTR Investments Consulting on September 26, 2024 and sell it today you would lose (0.08) from holding CTR Investments Consulting or give up 80.0% of portfolio value over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Significant
Accuracy	99.8%
Values	Daily Returns

CTR Investments Consulting  vs.  A1 Group

CTR Investments Cons

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days CTR Investments Consulting has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of latest abnormal performance, the Stock's basic indicators remain strong and the current disturbance on Wall Street may also be a sign of long term gains for the company investors.

A1 Group

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days A1 Group has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of very fragile basic indicators, A1 may actually be approaching a critical reversion point that can send shares even higher in January 2025.

Pair Trading with CTR Investments and A1

The main advantage of trading using opposite CTR Investments and A1 positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if CTR Investments position performs unexpectedly, A1 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 A1 will offset losses from the drop in A1's long position.

The idea behind CTR Investments Consulting and A1 Group 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.

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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 Theme Ratings module to determine theme ratings based on digital equity recommendations. Macroaxis theme ratings are based on combination of fundamental analysis and risk-adjusted market performance.