Correlation Between Alpha One and CTR Investments

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

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

Diversification Opportunities for Alpha One and CTR Investments

-0.04

Correlation Coefficient

Alpha One  CTR Investments

Good diversification

The 3 months correlation between Alpha and CTR is -0.04. Overlapping area represents the amount of risk that can be diversified away by holding Alpha One and CTR Investments Consulting in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on CTR Investments Cons and Alpha One 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 Alpha One are associated (or correlated) with CTR Investments. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of CTR Investments Cons has no effect on the direction of Alpha One i.e., Alpha One and CTR Investments go up and down completely randomly.

Pair Corralation between Alpha One and CTR Investments

Given the investment horizon of 90 days Alpha One is expected to under-perform the CTR Investments. But the pink sheet apears to be less risky and, when comparing its historical volatility, Alpha One is 5.71 times less risky than CTR Investments. The pink sheet trades about -0.12 of its potential returns per unit of risk. The CTR Investments Consulting is currently generating about 0.11 of returns per unit of risk over similar time horizon. If you would invest  0.03  in CTR Investments Consulting on December 1, 2024 and sell it today you would earn a total of  0.00  from holding CTR Investments Consulting or generate 0.0% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Insignificant
Accuracy	96.83%
Values	Daily Returns

Alpha One  vs.  CTR Investments Consulting

Alpha One

Risk-Adjusted Performance

Very Weak

Over the last 90 days Alpha One has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of weak performance in the last few months, the Stock's basic indicators remain very healthy which may send shares a bit higher in April 2025. The recent disarray may also be a sign of long period up-swing for the firm investors.

CTR Investments Cons

Risk-Adjusted Performance

OK

Compared to the overall equity markets, risk-adjusted returns on investments in CTR Investments Consulting are ranked lower than 8 (%) of all global equities and portfolios over the last 90 days. In spite of fairly inconsistent basic indicators, CTR Investments showed solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Alpha One and CTR Investments

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

The idea behind Alpha One and CTR Investments Consulting 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.