Correlation Between CTCI Corp and Falcon Power

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

By analyzing existing cross correlation between CTCI Corp and Falcon Power Co, you can compare the effects of market volatilities on CTCI Corp and Falcon Power 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 Falcon Power. Check out your portfolio center. Please also check ongoing floating volatility patterns of CTCI Corp and Falcon Power.

Diversification Opportunities for CTCI Corp and Falcon Power

-0.25

Correlation Coefficient

CTCI Corp  Falcon Power

Very good diversification

The 3 months correlation between CTCI and Falcon is -0.25. Overlapping area represents the amount of risk that can be diversified away by holding CTCI Corp and Falcon Power Co in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Falcon Power 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 Falcon Power. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Falcon Power has no effect on the direction of CTCI Corp i.e., CTCI Corp and Falcon Power go up and down completely randomly.

Pair Corralation between CTCI Corp and Falcon Power

Assuming the 90 days trading horizon CTCI Corp is expected to generate 0.42 times more return on investment than Falcon Power. However, CTCI Corp is 2.35 times less risky than Falcon Power. It trades about 0.11 of its potential returns per unit of risk. Falcon Power Co is currently generating about -0.14 per unit of risk. If you would invest  3,900  in CTCI Corp on December 29, 2024 and sell it today you would earn a total of  215.00  from holding CTCI Corp or generate 5.51% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Insignificant
Accuracy	98.25%
Values	Daily Returns

CTCI Corp  vs.  Falcon Power Co

CTCI Corp

Risk-Adjusted Performance

OK

Compared to the overall equity markets, risk-adjusted returns on investments in CTCI Corp are ranked lower than 9 (%) 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.

Falcon Power

Risk-Adjusted Performance

Very Weak

Over the last 90 days Falcon Power Co has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of abnormal performance in the last few months, the Stock's basic indicators remain fairly stable which may send shares a bit higher in April 2025. The latest fuss may also be a sign of long-term up-swing for the venture sophisticated investors.

Pair Trading with CTCI Corp and Falcon Power

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

The idea behind CTCI Corp and Falcon Power Co 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 My Watchlist Analysis module to analyze my current watchlist and to refresh optimization strategy. Macroaxis watchlist is based on self-learning algorithm to remember stocks you like.