Correlation Between CTR Investments and Kasten

Can any of the company-specific risk be diversified away by investing in both CTR Investments and Kasten 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 Kasten 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 Kasten Inc, you can compare the effects of market volatilities on CTR Investments and Kasten 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 Kasten. Check out your portfolio center. Please also check ongoing floating volatility patterns of CTR Investments and Kasten.

Diversification Opportunities for CTR Investments and Kasten

0.24

Correlation Coefficient

CTR Investments  Kasten

Modest diversification

The 3 months correlation between CTR and Kasten is 0.24. Overlapping area represents the amount of risk that can be diversified away by holding CTR Investments Consulting and Kasten Inc in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Kasten Inc 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 Kasten. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Kasten Inc has no effect on the direction of CTR Investments i.e., CTR Investments and Kasten go up and down completely randomly.

Pair Corralation between CTR Investments and Kasten

Given the investment horizon of 90 days CTR Investments Consulting is expected to generate 1.26 times more return on investment than Kasten. However, CTR Investments is 1.26 times more volatile than Kasten Inc. It trades about 0.07 of its potential returns per unit of risk. Kasten Inc is currently generating about 0.06 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	Very Weak
Accuracy	99.6%
Values	Daily Returns

CTR Investments Consulting  vs.  Kasten Inc

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.

Kasten Inc

Risk-Adjusted Performance

6 of 100

Modest

Compared to the overall equity markets, risk-adjusted returns on investments in Kasten Inc are ranked lower than 6 (%) of all global equities and portfolios over the last 90 days. In spite of comparatively abnormal basic indicators, Kasten unveiled solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with CTR Investments and Kasten

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

The idea behind CTR Investments Consulting and Kasten Inc 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 Investing Opportunities module to build portfolios using our predefined set of ideas and optimize them against your investing preferences.