Correlation Between CT Private and ETC On

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

By analyzing existing cross correlation between CT Private Equity and ETC on CMCI, you can compare the effects of market volatilities on CT Private and ETC On 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 CT Private with a short position of ETC On. Check out your portfolio center. Please also check ongoing floating volatility patterns of CT Private and ETC On.

Diversification Opportunities for CT Private and ETC On

0.37

Correlation Coefficient

CT Private  ETC On

Weak diversification

The 3 months correlation between CTPE and ETC is 0.37. Overlapping area represents the amount of risk that can be diversified away by holding CT Private Equity and ETC on CMCI in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on ETC on CMCI and CT Private 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 CT Private Equity are associated (or correlated) with ETC On. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of ETC on CMCI has no effect on the direction of CT Private i.e., CT Private and ETC On go up and down completely randomly.

Pair Corralation between CT Private and ETC On

Assuming the 90 days trading horizon CT Private Equity is expected to generate 1.99 times more return on investment than ETC On. However, CT Private is 1.99 times more volatile than ETC on CMCI. It trades about 0.41 of its potential returns per unit of risk. ETC on CMCI is currently generating about 0.2 per unit of risk. If you would invest  43,500  in CT Private Equity on September 12, 2024 and sell it today you would earn a total of  4,500  from holding CT Private Equity or generate 10.34% return on investment over 90 days.

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

CT Private Equity  vs.  ETC on CMCI

CT Private Equity

Risk-Adjusted Performance

7 of 100

OK

Compared to the overall equity markets, risk-adjusted returns on investments in CT Private Equity are ranked lower than 7 (%) of all global equities and portfolios over the last 90 days. In spite of comparatively uncertain basic indicators, CT Private may actually be approaching a critical reversion point that can send shares even higher in January 2025.

ETC on CMCI

Risk-Adjusted Performance

12 of 100

Good

Compared to the overall equity markets, risk-adjusted returns on investments in ETC on CMCI are ranked lower than 12 (%) of all global equities and portfolios over the last 90 days. In spite of comparatively unsteady basic indicators, ETC On may actually be approaching a critical reversion point that can send shares even higher in January 2025.

Pair Trading with CT Private and ETC On

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

The idea behind CT Private Equity and ETC on CMCI 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 ETF Categories module to list of ETF categories grouped based on various criteria, such as the investment strategy or type of investments.