Correlation Between CTS and CROWN

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

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

Diversification Opportunities for CTS and CROWN

-0.46

Correlation Coefficient

CTS  CROWN

Very good diversification

The 3 months correlation between CTS and CROWN is -0.46. Overlapping area represents the amount of risk that can be diversified away by holding CTS Corp. and CROWN CASTLE INTL in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on CROWN CASTLE INTL 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 CROWN. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of CROWN CASTLE INTL has no effect on the direction of CTS i.e., CTS and CROWN go up and down completely randomly.

Pair Corralation between CTS and CROWN

Considering the 90-day investment horizon CTS Corporation is expected to generate 2.11 times more return on investment than CROWN. However, CTS is 2.11 times more volatile than CROWN CASTLE INTL. It trades about -0.1 of its potential returns per unit of risk. CROWN CASTLE INTL is currently generating about -0.3 per unit of risk. If you would invest  5,429  in CTS Corporation on September 23, 2024 and sell it today you would lose (209.00) from holding CTS Corporation or give up 3.85% of portfolio value over 90 days.

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

CTS Corp.  vs.  CROWN CASTLE INTL

CTS Corporation

Risk-Adjusted Performance

5 of 100

Modest

Compared to the overall equity markets, risk-adjusted returns on investments in CTS Corporation are ranked lower than 5 (%) of all global equities and portfolios over the last 90 days. In spite of comparatively inconsistent basic indicators, CTS may actually be approaching a critical reversion point that can send shares even higher in January 2025.

CROWN CASTLE INTL

Risk-Adjusted Performance

0 of 100

Very Weak

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

Pair Trading with CTS and CROWN

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

The idea behind CTS Corporation and CROWN CASTLE INTL 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 Sync Your Broker module to sync your existing holdings, watchlists, positions or portfolios from thousands of online brokerage services, banks, investment account aggregators and robo-advisors..