Correlation Between CTT Systems and Enea AB

Can any of the company-specific risk be diversified away by investing in both CTT Systems and Enea 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 Enea 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 Enea AB, you can compare the effects of market volatilities on CTT Systems and Enea 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 Enea AB. Check out your portfolio center. Please also check ongoing floating volatility patterns of CTT Systems and Enea AB.

Diversification Opportunities for CTT Systems and Enea AB

-0.75

Correlation Coefficient

CTT Systems  Enea AB

Pay attention - limited upside

The 3 months correlation between CTT and Enea is -0.75. Overlapping area represents the amount of risk that can be diversified away by holding CTT Systems AB and Enea AB in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Enea 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 Enea AB. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Enea AB has no effect on the direction of CTT Systems i.e., CTT Systems and Enea AB go up and down completely randomly.

Pair Corralation between CTT Systems and Enea AB

Assuming the 90 days trading horizon CTT Systems AB is expected to under-perform the Enea AB. In addition to that, CTT Systems is 1.15 times more volatile than Enea AB. It trades about -0.02 of its total potential returns per unit of risk. Enea AB is currently generating about 0.09 per unit of volatility. If you would invest  8,850  in Enea AB on September 2, 2024 and sell it today you would earn a total of  980.00  from holding Enea AB or generate 11.07% return on investment over 90 days.

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

CTT Systems AB  vs.  Enea AB

CTT Systems AB

Risk-Adjusted Performance

0 of 100

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 comparatively stable basic indicators, CTT Systems is not utilizing all of its potentials. The current stock price uproar, may contribute to short-horizon losses for the private investors.

Enea AB

Risk-Adjusted Performance

7 of 100

OK

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

Pair Trading with CTT Systems and Enea AB

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

The idea behind CTT Systems AB and Enea 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 Instant Ratings module to determine any equity ratings based on digital recommendations. Macroaxis instant equity ratings are based on combination of fundamental analysis and risk-adjusted market performance.