Correlation Between CTP NV and JT ARCH

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

By analyzing existing cross correlation between CTP NV and JT ARCH INVESTMENTS, you can compare the effects of market volatilities on CTP NV and JT ARCH 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 JT ARCH. Check out your portfolio center. Please also check ongoing floating volatility patterns of CTP NV and JT ARCH.

Diversification Opportunities for CTP NV and JT ARCH

-0.72

Correlation Coefficient

CTP NV  JT ARCH

Pay attention - limited upside

The 3 months correlation between CTP and JTINA is -0.72. Overlapping area represents the amount of risk that can be diversified away by holding CTP NV and JT ARCH INVESTMENTS in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on JT ARCH INVESTMENTS 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 are associated (or correlated) with JT ARCH. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of JT ARCH INVESTMENTS has no effect on the direction of CTP NV i.e., CTP NV and JT ARCH go up and down completely randomly.

Pair Corralation between CTP NV and JT ARCH

Assuming the 90 days trading horizon CTP NV is expected to generate 6.11 times less return on investment than JT ARCH. In addition to that, CTP NV is 3.65 times more volatile than JT ARCH INVESTMENTS. It trades about 0.02 of its total potential returns per unit of risk. JT ARCH INVESTMENTS is currently generating about 0.37 per unit of volatility. If you would invest  169.00  in JT ARCH INVESTMENTS on September 27, 2024 and sell it today you would earn a total of  4.00  from holding JT ARCH INVESTMENTS or generate 2.37% return on investment over 90 days.

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

CTP NV  vs.  JT ARCH INVESTMENTS

CTP NV

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days CTP NV has generated negative risk-adjusted returns adding no value to investors with long positions. Even with latest weak performance, the Stock's basic indicators remain invariable and the latest agitation on Wall Street may also be a sign of long-running gains for the enterprise retail investors.

JT ARCH INVESTMENTS

Risk-Adjusted Performance

19 of 100

Solid

Compared to the overall equity markets, risk-adjusted returns on investments in JT ARCH INVESTMENTS are ranked lower than 19 (%) of all global equities and portfolios over the last 90 days. Even with relatively invariable basic indicators, JT ARCH is not utilizing all of its potentials. The latest stock price agitation, may contribute to short-term losses for the retail investors.

Pair Trading with CTP NV and JT ARCH

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

The idea behind CTP NV and JT ARCH INVESTMENTS 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 Companies Directory module to evaluate performance of over 100,000 Stocks, Funds, and ETFs against different fundamentals.