Correlation Between Ctac NV and Kendrion

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

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

Diversification Opportunities for Ctac NV and Kendrion

0.45

Correlation Coefficient

Ctac NV  Kendrion

Very weak diversification

The 3 months correlation between Ctac and Kendrion is 0.45. Overlapping area represents the amount of risk that can be diversified away by holding Ctac NV and Kendrion NV in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Kendrion NV and Ctac NV 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 Ctac NV are associated (or correlated) with Kendrion. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Kendrion NV has no effect on the direction of Ctac NV i.e., Ctac NV and Kendrion go up and down completely randomly.

Pair Corralation between Ctac NV and Kendrion

Assuming the 90 days trading horizon Ctac NV is expected to generate 1.1 times more return on investment than Kendrion. However, Ctac NV is 1.1 times more volatile than Kendrion NV. It trades about -0.01 of its potential returns per unit of risk. Kendrion NV is currently generating about -0.03 per unit of risk. If you would invest  341.00  in Ctac NV on September 17, 2024 and sell it today you would lose (51.00) from holding Ctac NV or give up 14.96% of portfolio value over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Weak
Accuracy	99.35%
Values	Daily Returns

Ctac NV  vs.  Kendrion NV

Ctac NV

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Ctac NV has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of comparatively stable basic indicators, Ctac NV is not utilizing all of its potentials. The current stock price uproar, may contribute to short-horizon losses for the private investors.

Kendrion NV

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Kendrion NV has generated negative risk-adjusted returns adding no value to investors with long positions. Despite latest weak performance, the Stock's basic indicators remain strong and the current disturbance on Wall Street may also be a sign of long term gains for the company investors.

Pair Trading with Ctac NV and Kendrion

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

The idea behind Ctac NV and Kendrion NV 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 Transaction History module to view history of all your transactions and understand their impact on performance.