Correlation Between CTT Systems and BioGaia AB

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

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

Diversification Opportunities for CTT Systems and BioGaia AB

-0.16

Correlation Coefficient

CTT Systems  BioGaia AB

Good diversification

The 3 months correlation between CTT and BioGaia is -0.16. Overlapping area represents the amount of risk that can be diversified away by holding CTT Systems AB and BioGaia AB in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on BioGaia AB and CTT Systems 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 CTT Systems AB are associated (or correlated) with BioGaia AB. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of BioGaia AB has no effect on the direction of CTT Systems i.e., CTT Systems and BioGaia AB go up and down completely randomly.

Pair Corralation between CTT Systems and BioGaia AB

Assuming the 90 days trading horizon CTT Systems AB is expected to under-perform the BioGaia AB. In addition to that, CTT Systems is 1.76 times more volatile than BioGaia AB. It trades about -0.12 of its total potential returns per unit of risk. BioGaia AB is currently generating about -0.02 per unit of volatility. If you would invest  11,190  in BioGaia AB on December 30, 2024 and sell it today you would lose (390.00) from holding BioGaia AB or give up 3.49% of portfolio value over 90 days.

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

CTT Systems AB  vs.  BioGaia AB

CTT Systems AB

Risk-Adjusted Performance

Very Weak

Over the last 90 days CTT Systems AB 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.

BioGaia AB

Risk-Adjusted Performance

Very Weak

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

Pair Trading with CTT Systems and BioGaia AB

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

The idea behind CTT Systems AB and BioGaia AB 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 Commodity Directory module to find actively traded commodities issued by global exchanges.