Correlation Between CTS Eventim and SANOK RUBBER

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

Diversification Opportunities for CTS Eventim and SANOK RUBBER

0.41

Correlation Coefficient

CTS Eventim  SANOK RUBBER

Very weak diversification

The 3 months correlation between CTS and SANOK is 0.41. Overlapping area represents the amount of risk that can be diversified away by holding CTS Eventim AG and SANOK RUBBER ZY in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on SANOK RUBBER ZY 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 SANOK RUBBER. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of SANOK RUBBER ZY has no effect on the direction of CTS Eventim i.e., CTS Eventim and SANOK RUBBER go up and down completely randomly.

Pair Corralation between CTS Eventim and SANOK RUBBER

Assuming the 90 days trading horizon CTS Eventim AG is expected to generate 0.65 times more return on investment than SANOK RUBBER. However, CTS Eventim AG is 1.53 times less risky than SANOK RUBBER. It trades about 0.07 of its potential returns per unit of risk. SANOK RUBBER ZY is currently generating about 0.04 per unit of risk. If you would invest  6,218  in CTS Eventim AG on September 12, 2024 and sell it today you would earn a total of  2,072  from holding CTS Eventim AG or generate 33.32% return on investment over 90 days.

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

CTS Eventim AG  vs.  SANOK RUBBER ZY

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

SANOK RUBBER ZY

Risk-Adjusted Performance

9 of 100

OK

Compared to the overall equity markets, risk-adjusted returns on investments in SANOK RUBBER ZY are ranked lower than 9 (%) of all global equities and portfolios over the last 90 days. Despite nearly fragile basic indicators, SANOK RUBBER reported solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with CTS Eventim and SANOK RUBBER

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

The idea behind CTS Eventim AG and SANOK RUBBER ZY 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.