Correlation Between ClearOne and CTS

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

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

Diversification Opportunities for ClearOne and CTS

-0.55

Correlation Coefficient

ClearOne  CTS

Excellent diversification

The 3 months correlation between ClearOne and CTS is -0.55. Overlapping area represents the amount of risk that can be diversified away by holding ClearOne and CTS Corp. in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on CTS Corporation and ClearOne 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 ClearOne are associated (or correlated) with CTS. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of CTS Corporation has no effect on the direction of ClearOne i.e., ClearOne and CTS go up and down completely randomly.

Pair Corralation between ClearOne and CTS

Given the investment horizon of 90 days ClearOne is expected to under-perform the CTS. In addition to that, ClearOne is 1.54 times more volatile than CTS Corporation. It trades about -0.01 of its total potential returns per unit of risk. CTS Corporation is currently generating about 0.08 per unit of volatility. If you would invest  4,823  in CTS Corporation on September 26, 2024 and sell it today you would earn a total of  519.00  from holding CTS Corporation or generate 10.76% return on investment over 90 days.

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

ClearOne  vs.  CTS Corp.

ClearOne

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days ClearOne has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of very healthy basic indicators, ClearOne is not utilizing all of its potentials. The newest stock price disarray, may contribute to short-term losses for the investors.

CTS Corporation

Risk-Adjusted Performance

6 of 100

Modest

Compared to the overall equity markets, risk-adjusted returns on investments in CTS Corporation are ranked lower than 6 (%) of all global equities and portfolios over the last 90 days. In spite of comparatively uncertain basic indicators, CTS may actually be approaching a critical reversion point that can send shares even higher in January 2025.

Pair Trading with ClearOne and CTS

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

The idea behind ClearOne and CTS Corporation 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 Commodity Directory module to find actively traded commodities issued by global exchanges.