Correlation Between CTS and PowerFleet,

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

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

Diversification Opportunities for CTS and PowerFleet,

-0.01

Correlation Coefficient

CTS  PowerFleet,

Good diversification

The 3 months correlation between CTS and PowerFleet, is -0.01. Overlapping area represents the amount of risk that can be diversified away by holding CTS Corp. and PowerFleet, in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on PowerFleet, and CTS 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 CTS Corporation are associated (or correlated) with PowerFleet,. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of PowerFleet, has no effect on the direction of CTS i.e., CTS and PowerFleet, go up and down completely randomly.

Pair Corralation between CTS and PowerFleet,

Considering the 90-day investment horizon CTS Corporation is expected to under-perform the PowerFleet,. But the stock apears to be less risky and, when comparing its historical volatility, CTS Corporation is 3.49 times less risky than PowerFleet,. The stock trades about -0.19 of its potential returns per unit of risk. The PowerFleet, is currently generating about -0.01 of returns per unit of risk over similar time horizon. If you would invest  666.00  in PowerFleet, on December 28, 2024 and sell it today you would lose (73.00) from holding PowerFleet, or give up 10.96% of portfolio value over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Insignificant
Accuracy	100.0%
Values	Daily Returns

CTS Corp.  vs.  PowerFleet,

CTS Corporation

Risk-Adjusted Performance

Very Weak

Over the last 90 days CTS Corporation has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of uncertain performance in the last few months, the Stock's basic indicators remain comparatively stable which may send shares a bit higher in April 2025. The newest uproar may also be a sign of mid-term up-swing for the firm private investors.

PowerFleet,

Risk-Adjusted Performance

Very Weak

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

Pair Trading with CTS and PowerFleet,

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

The idea behind CTS Corporation and PowerFleet, 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 Idea Analyzer module to analyze all characteristics, volatility and risk-adjusted return of Macroaxis ideas.