Correlation Between CTS and BARRICK

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

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

Diversification Opportunities for CTS and BARRICK

-0.57

Correlation Coefficient

CTS  BARRICK

Excellent diversification

The 3 months correlation between CTS and BARRICK is -0.57. Overlapping area represents the amount of risk that can be diversified away by holding CTS Corp. and BARRICK PD AUSTRALIA in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on BARRICK PD AUSTRALIA 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 BARRICK. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of BARRICK PD AUSTRALIA has no effect on the direction of CTS i.e., CTS and BARRICK go up and down completely randomly.

Pair Corralation between CTS and BARRICK

Considering the 90-day investment horizon CTS Corporation is expected to under-perform the BARRICK. In addition to that, CTS is 1.5 times more volatile than BARRICK PD AUSTRALIA. It trades about -0.2 of its total potential returns per unit of risk. BARRICK PD AUSTRALIA is currently generating about -0.06 per unit of volatility. If you would invest  10,507  in BARRICK PD AUSTRALIA on October 9, 2024 and sell it today you would lose (117.00) from holding BARRICK PD AUSTRALIA or give up 1.11% of portfolio value over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Very Weak
Accuracy	94.74%
Values	Daily Returns

CTS Corp.  vs.  BARRICK PD AUSTRALIA

CTS Corporation

Risk-Adjusted Performance

4 of 100

Modest

Compared to the overall equity markets, risk-adjusted returns on investments in CTS Corporation are ranked lower than 4 (%) 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 February 2025.

BARRICK PD AUSTRALIA

Risk-Adjusted Performance

0 of 100

Very Weak

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

Pair Trading with CTS and BARRICK

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

The idea behind CTS Corporation and BARRICK PD AUSTRALIA 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 Equity Forecasting module to use basic forecasting models to generate price predictions and determine price momentum.