Correlation Between LK Engineering and CTCI Corp

Specify exactly 2 symbols:
Can any of the company-specific risk be diversified away by investing in both LK Engineering and CTCI Corp 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 LK Engineering and CTCI Corp into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between LK Engineering Co and CTCI Corp, you can compare the effects of market volatilities on LK Engineering and CTCI Corp 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 LK Engineering with a short position of CTCI Corp. Check out your portfolio center. Please also check ongoing floating volatility patterns of LK Engineering and CTCI Corp.

Diversification Opportunities for LK Engineering and CTCI Corp

0.0
  Correlation Coefficient

Pay attention - limited upside

The 3 months correlation between 6139 and CTCI is 0.0. Overlapping area represents the amount of risk that can be diversified away by holding LK Engineering Co and CTCI Corp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on CTCI Corp and LK Engineering 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 LK Engineering Co are associated (or correlated) with CTCI Corp. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of CTCI Corp has no effect on the direction of LK Engineering i.e., LK Engineering and CTCI Corp go up and down completely randomly.

Pair Corralation between LK Engineering and CTCI Corp

Assuming the 90 days trading horizon LK Engineering Co is expected to generate 2.6 times more return on investment than CTCI Corp. However, LK Engineering is 2.6 times more volatile than CTCI Corp. It trades about 0.07 of its potential returns per unit of risk. CTCI Corp is currently generating about -0.21 per unit of risk. If you would invest  22,850  in LK Engineering Co on October 26, 2024 and sell it today you would earn a total of  2,150  from holding LK Engineering Co or generate 9.41% return on investment over 90 days.
Time Period3 Months [change]
DirectionFlat 
StrengthInsignificant
Accuracy100.0%
ValuesDaily Returns

LK Engineering Co  vs.  CTCI Corp

 Performance 
       Timeline  
LK Engineering 

Risk-Adjusted Performance

5 of 100

 
Weak
 
Strong
Modest
Compared to the overall equity markets, risk-adjusted returns on investments in LK Engineering Co are ranked lower than 5 (%) of all global equities and portfolios over the last 90 days. In spite of fairly abnormal basic indicators, LK Engineering may actually be approaching a critical reversion point that can send shares even higher in February 2025.
CTCI Corp 

Risk-Adjusted Performance

0 of 100

 
Weak
 
Strong
Very Weak
Over the last 90 days CTCI Corp 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 stable and the latest fuss on Wall Street may also be a sign of long-term gains for the venture sophisticated investors.

LK Engineering and CTCI Corp Volatility Contrast

   Predicted Return Density   
       Returns  

Pair Trading with LK Engineering and CTCI Corp

The main advantage of trading using opposite LK Engineering and CTCI Corp positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if LK Engineering position performs unexpectedly, CTCI Corp 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 CTCI Corp will offset losses from the drop in CTCI Corp's long position.
The idea behind LK Engineering Co and CTCI Corp 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 Idea Optimizer module to use advanced portfolio builder with pre-computed micro ideas to build optimal portfolio .

Other Complementary Tools

Portfolio Suggestion
Get suggestions outside of your existing asset allocation including your own model portfolios
Money Flow Index
Determine momentum by analyzing Money Flow Index and other technical indicators
Portfolio Dashboard
Portfolio dashboard that provides centralized access to all your investments
Crypto Correlations
Use cryptocurrency correlation module to diversify your cryptocurrency portfolio across multiple coins
Portfolio Holdings
Check your current holdings and cash postion to detemine if your portfolio needs rebalancing