Correlation Between CDTi Advanced and Arq

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

By analyzing existing cross correlation between CDTi Advanced Materials and Arq Inc, you can compare the effects of market volatilities on CDTi Advanced and Arq 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 CDTi Advanced with a short position of Arq. Check out your portfolio center. Please also check ongoing floating volatility patterns of CDTi Advanced and Arq.

Diversification Opportunities for CDTi Advanced and Arq

0.0

Correlation Coefficient

CDTi Advanced  Arq

Pay attention - limited upside

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

Pair Corralation between CDTi Advanced and Arq

If you would invest (100.00) in CDTi Advanced Materials on November 28, 2024 and sell it today you would earn a total of  100.00  from holding CDTi Advanced Materials or generate -100.0% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Flat
Strength	Insignificant
Accuracy	0.0%
Values	Daily Returns

CDTi Advanced Materials  vs.  Arq Inc

CDTi Advanced Materials

Risk-Adjusted Performance

Very Weak

Over the last 90 days CDTi Advanced Materials has generated negative risk-adjusted returns adding no value to investors with long positions. Despite fairly strong basic indicators, CDTi Advanced is not utilizing all of its potentials. The latest stock price confusion, may contribute to short-horizon losses for the traders.

Arq Inc

Risk-Adjusted Performance

Very Weak

Over the last 90 days Arq Inc has generated negative risk-adjusted returns adding no value to investors with long positions. Even with uncertain performance in the last few months, the Stock's basic indicators remain relatively invariable which may send shares a bit higher in March 2025. The latest agitation may also be a sign of long-running up-swing for the enterprise retail investors.

Pair Trading with CDTi Advanced and Arq

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

The idea behind CDTi Advanced Materials and Arq Inc 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 Risk-Return Analysis module to view associations between returns expected from investment and the risk you assume.