Correlation Between CTCI Corp and De Licacy

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

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

Diversification Opportunities for CTCI Corp and De Licacy

0.62

Correlation Coefficient

CTCI Corp  De Licacy

Poor diversification

The 3 months correlation between CTCI and 1464 is 0.62. Overlapping area represents the amount of risk that can be diversified away by holding CTCI Corp and De Licacy Industrial in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on De Licacy Industrial and CTCI Corp 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 CTCI Corp are associated (or correlated) with De Licacy. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of De Licacy Industrial has no effect on the direction of CTCI Corp i.e., CTCI Corp and De Licacy go up and down completely randomly.

Pair Corralation between CTCI Corp and De Licacy

Assuming the 90 days trading horizon CTCI Corp is expected to generate 1.71 times less return on investment than De Licacy. But when comparing it to its historical volatility, CTCI Corp is 2.09 times less risky than De Licacy. It trades about 0.07 of its potential returns per unit of risk. De Licacy Industrial is currently generating about 0.06 of returns per unit of risk over similar time horizon. If you would invest  1,675  in De Licacy Industrial on December 20, 2024 and sell it today you would earn a total of  90.00  from holding De Licacy Industrial or generate 5.37% return on investment over 90 days.

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

CTCI Corp  vs.  De Licacy Industrial

CTCI Corp

Risk-Adjusted Performance

Modest

Compared to the overall equity markets, risk-adjusted returns on investments in CTCI Corp are ranked lower than 5 (%) of all global equities and portfolios over the last 90 days. In spite of fairly stable basic indicators, CTCI Corp is not utilizing all of its potentials. The latest stock price fuss, may contribute to near-short-term losses for the sophisticated investors.

De Licacy Industrial

Risk-Adjusted Performance

Insignificant

Compared to the overall equity markets, risk-adjusted returns on investments in De Licacy Industrial are ranked lower than 4 (%) of all global equities and portfolios over the last 90 days. In spite of fairly abnormal basic indicators, De Licacy may actually be approaching a critical reversion point that can send shares even higher in April 2025.

Pair Trading with CTCI Corp and De Licacy

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

The idea behind CTCI Corp and De Licacy Industrial 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 Competition Analyzer module to analyze and compare many basic indicators for a group of related or unrelated entities.