Correlation Between CTR Investments and UHF Logistics

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

Diversification Opportunities for CTR Investments and UHF Logistics

0.09

Correlation Coefficient

CTR Investments  UHF Logistics

Significant diversification

The 3 months correlation between CTR and UHF is 0.09. Overlapping area represents the amount of risk that can be diversified away by holding CTR Investments Consulting and UHF Logistics Group in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on UHF Logistics 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 UHF Logistics. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of UHF Logistics Group has no effect on the direction of CTR Investments i.e., CTR Investments and UHF Logistics go up and down completely randomly.

Pair Corralation between CTR Investments and UHF Logistics

Given the investment horizon of 90 days CTR Investments is expected to generate 1.8 times less return on investment than UHF Logistics. But when comparing it to its historical volatility, CTR Investments Consulting is 1.49 times less risky than UHF Logistics. It trades about 0.07 of its potential returns per unit of risk. UHF Logistics Group is currently generating about 0.08 of returns per unit of risk over similar time horizon. If you would invest  2.30  in UHF Logistics Group on September 26, 2024 and sell it today you would earn a total of  5.81  from holding UHF Logistics Group or generate 252.61% return on investment over 90 days.

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

CTR Investments Consulting  vs.  UHF Logistics 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 inconsistent 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.

UHF Logistics Group

Risk-Adjusted Performance

11 of 100

Good

Compared to the overall equity markets, risk-adjusted returns on investments in UHF Logistics Group are ranked lower than 11 (%) of all global equities and portfolios over the last 90 days. Despite nearly fragile essential indicators, UHF Logistics reported solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with CTR Investments and UHF Logistics

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

The idea behind CTR Investments Consulting and UHF Logistics 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 Content Syndication module to quickly integrate customizable finance content to your own investment portal.