Correlation Between CAVA Group, and CTS

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

By analyzing existing cross correlation between CAVA Group, and CTS Corporation, you can compare the effects of market volatilities on CAVA Group, and CTS 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 CAVA Group, with a short position of CTS. Check out your portfolio center. Please also check ongoing floating volatility patterns of CAVA Group, and CTS.

Diversification Opportunities for CAVA Group, and CTS

0.35

Correlation Coefficient

CAVA Group,  CTS

Weak diversification

The 3 months correlation between CAVA and CTS is 0.35. Overlapping area represents the amount of risk that can be diversified away by holding CAVA Group, and CTS Corp. in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on CTS Corporation and CAVA Group, 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 CAVA Group, are associated (or correlated) with CTS. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of CTS Corporation has no effect on the direction of CAVA Group, i.e., CAVA Group, and CTS go up and down completely randomly.

Pair Corralation between CAVA Group, and CTS

Given the investment horizon of 90 days CAVA Group, is expected to under-perform the CTS. In addition to that, CAVA Group, is 1.96 times more volatile than CTS Corporation. It trades about -0.26 of its total potential returns per unit of risk. CTS Corporation is currently generating about -0.05 per unit of volatility. If you would invest  5,446  in CTS Corporation on September 27, 2024 and sell it today you would lose (104.00) from holding CTS Corporation or give up 1.91% of portfolio value over 90 days.

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

CAVA Group,  vs.  CTS Corp.

CAVA Group,

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days CAVA Group, has generated negative risk-adjusted returns adding no value to investors with long positions. Despite somewhat strong basic indicators, CAVA Group, is not utilizing all of its potentials. The current stock price disturbance, may contribute to short-term losses for the investors.

CTS Corporation

Risk-Adjusted Performance

6 of 100

Modest

Compared to the overall equity markets, risk-adjusted returns on investments in CTS Corporation are ranked lower than 6 (%) of all global equities and portfolios over the last 90 days. In spite of comparatively uncertain basic indicators, CTS may actually be approaching a critical reversion point that can send shares even higher in January 2025.

Pair Trading with CAVA Group, and CTS

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

The idea behind CAVA Group, and CTS Corporation 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 Top Crypto Exchanges module to search and analyze digital assets across top global cryptocurrency exchanges.