Correlation Between DGB Group and CTP NV

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

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

Diversification Opportunities for DGB Group and CTP NV

-0.56

Correlation Coefficient

DGB Group  CTP NV

Excellent diversification

The 3 months correlation between DGB and CTP is -0.56. Overlapping area represents the amount of risk that can be diversified away by holding DGB Group NV and CTP NV in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on CTP NV and DGB Group 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 DGB Group NV are associated (or correlated) with CTP NV. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of CTP NV has no effect on the direction of DGB Group i.e., DGB Group and CTP NV go up and down completely randomly.

Pair Corralation between DGB Group and CTP NV

Assuming the 90 days trading horizon DGB Group NV is expected to under-perform the CTP NV. In addition to that, DGB Group is 3.16 times more volatile than CTP NV. It trades about -0.25 of its total potential returns per unit of risk. CTP NV is currently generating about 0.11 per unit of volatility. If you would invest  1,492  in CTP NV on December 25, 2024 and sell it today you would earn a total of  144.00  from holding CTP NV or generate 9.65% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Very Weak
Accuracy	98.39%
Values	Daily Returns

DGB Group NV  vs.  CTP NV

DGB Group NV

Risk-Adjusted Performance

Very Weak

Over the last 90 days DGB Group NV has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of weak performance in the last few months, the Stock's fundamental drivers 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.

CTP NV

Risk-Adjusted Performance

OK

Over the last 90 days CTP NV has generated negative risk-adjusted returns adding no value to investors with long positions. Despite somewhat weak basic indicators, CTP NV may actually be approaching a critical reversion point that can send shares even higher in April 2025.

Pair Trading with DGB Group and CTP NV

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

The idea behind DGB Group NV and CTP NV 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 ETF Categories module to list of ETF categories grouped based on various criteria, such as the investment strategy or type of investments.