Correlation Between CTS Eventim and UNIVMUSIC GRPADR/050

Can any of the company-specific risk be diversified away by investing in both CTS Eventim and UNIVMUSIC GRPADR/050 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 Eventim and UNIVMUSIC GRPADR/050 into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between CTS Eventim AG and UNIVMUSIC GRPADR050, you can compare the effects of market volatilities on CTS Eventim and UNIVMUSIC GRPADR/050 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 Eventim with a short position of UNIVMUSIC GRPADR/050. Check out your portfolio center. Please also check ongoing floating volatility patterns of CTS Eventim and UNIVMUSIC GRPADR/050.

Diversification Opportunities for CTS Eventim and UNIVMUSIC GRPADR/050

-0.09

Correlation Coefficient

CTS Eventim  UNIVMUSIC GRPADR/050

Good diversification

The 3 months correlation between CTS and UNIVMUSIC is -0.09. Overlapping area represents the amount of risk that can be diversified away by holding CTS Eventim AG and UNIVMUSIC GRPADR050 in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on UNIVMUSIC GRPADR/050 and CTS Eventim 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 Eventim AG are associated (or correlated) with UNIVMUSIC GRPADR/050. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of UNIVMUSIC GRPADR/050 has no effect on the direction of CTS Eventim i.e., CTS Eventim and UNIVMUSIC GRPADR/050 go up and down completely randomly.

Pair Corralation between CTS Eventim and UNIVMUSIC GRPADR/050

Assuming the 90 days trading horizon CTS Eventim AG is expected to generate 1.37 times more return on investment than UNIVMUSIC GRPADR/050. However, CTS Eventim is 1.37 times more volatile than UNIVMUSIC GRPADR050. It trades about 0.35 of its potential returns per unit of risk. UNIVMUSIC GRPADR050 is currently generating about 0.05 per unit of risk. If you would invest  8,255  in CTS Eventim AG on October 22, 2024 and sell it today you would earn a total of  760.00  from holding CTS Eventim AG or generate 9.21% return on investment over 90 days.

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

CTS Eventim AG  vs.  UNIVMUSIC GRPADR050

CTS Eventim AG

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days CTS Eventim AG has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of latest uncertain performance, the Stock's fundamental indicators remain stable and the newest uproar on Wall Street may also be a sign of mid-term gains for the firm private investors.

UNIVMUSIC GRPADR/050

Risk-Adjusted Performance

4 of 100

Insignificant

Compared to the overall equity markets, risk-adjusted returns on investments in UNIVMUSIC GRPADR050 are ranked lower than 4 (%) of all global equities and portfolios over the last 90 days. Despite nearly stable fundamental indicators, UNIVMUSIC GRPADR/050 is not utilizing all of its potentials. The current stock price disturbance, may contribute to mid-run losses for the stockholders.

Pair Trading with CTS Eventim and UNIVMUSIC GRPADR/050

The main advantage of trading using opposite CTS Eventim and UNIVMUSIC GRPADR/050 positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if CTS Eventim position performs unexpectedly, UNIVMUSIC GRPADR/050 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 UNIVMUSIC GRPADR/050 will offset losses from the drop in UNIVMUSIC GRPADR/050's long position.

The idea behind CTS Eventim AG and UNIVMUSIC GRPADR050 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 Fundamental Analysis module to view fundamental data based on most recent published financial statements.