Correlation Between CTS Eventim and ViacomCBS

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

Diversification Opportunities for CTS Eventim and ViacomCBS

-0.76

Correlation Coefficient

CTS Eventim  ViacomCBS

Pay attention - limited upside

The 3 months correlation between CTS and ViacomCBS is -0.76. Overlapping area represents the amount of risk that can be diversified away by holding CTS Eventim AG and ViacomCBS in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on ViacomCBS 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 ViacomCBS. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of ViacomCBS has no effect on the direction of CTS Eventim i.e., CTS Eventim and ViacomCBS go up and down completely randomly.

Pair Corralation between CTS Eventim and ViacomCBS

Assuming the 90 days trading horizon CTS Eventim AG is expected to under-perform the ViacomCBS. In addition to that, CTS Eventim is 1.26 times more volatile than ViacomCBS. It trades about -0.16 of its total potential returns per unit of risk. ViacomCBS is currently generating about 0.11 per unit of volatility. If you would invest  1,985  in ViacomCBS on September 27, 2024 and sell it today you would earn a total of  175.00  from holding ViacomCBS or generate 8.82% return on investment over 90 days.

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

CTS Eventim AG  vs.  ViacomCBS

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.

ViacomCBS

Risk-Adjusted Performance

9 of 100

OK

Compared to the overall equity markets, risk-adjusted returns on investments in ViacomCBS are ranked lower than 9 (%) of all global equities and portfolios over the last 90 days. Despite nearly fragile basic indicators, ViacomCBS may actually be approaching a critical reversion point that can send shares even higher in January 2025.

Pair Trading with CTS Eventim and ViacomCBS

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

The idea behind CTS Eventim AG and ViacomCBS 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 Transaction History module to view history of all your transactions and understand their impact on performance.