Correlation Between H2O Retailing and CTP NV

Can any of the company-specific risk be diversified away by investing in both H2O Retailing 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 H2O Retailing and CTP NV into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between H2O Retailing and CTP NV EO, you can compare the effects of market volatilities on H2O Retailing 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 H2O Retailing with a short position of CTP NV. Check out your portfolio center. Please also check ongoing floating volatility patterns of H2O Retailing and CTP NV.

Diversification Opportunities for H2O Retailing and CTP NV

0.65

Correlation Coefficient

H2O Retailing  CTP NV

Poor diversification

The 3 months correlation between H2O and CTP is 0.65. Overlapping area represents the amount of risk that can be diversified away by holding H2O Retailing and CTP NV EO in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on CTP NV EO and H2O Retailing 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 H2O Retailing 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 EO has no effect on the direction of H2O Retailing i.e., H2O Retailing and CTP NV go up and down completely randomly.

Pair Corralation between H2O Retailing and CTP NV

Assuming the 90 days horizon H2O Retailing is expected to generate 1.5 times less return on investment than CTP NV. In addition to that, H2O Retailing is 1.13 times more volatile than CTP NV EO. It trades about 0.06 of its total potential returns per unit of risk. CTP NV EO is currently generating about 0.11 per unit of volatility. If you would invest  1,500  in CTP NV EO on December 19, 2024 and sell it today you would earn a total of  148.00  from holding CTP NV EO or generate 9.87% return on investment over 90 days.

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

H2O Retailing  vs.  CTP NV EO

H2O Retailing

Risk-Adjusted Performance

Modest

Compared to the overall equity markets, risk-adjusted returns on investments in H2O Retailing are ranked lower than 5 (%) of all global equities and portfolios over the last 90 days. Despite nearly fragile basic indicators, H2O Retailing may actually be approaching a critical reversion point that can send shares even higher in April 2025.

CTP NV EO

Risk-Adjusted Performance

OK

Compared to the overall equity markets, risk-adjusted returns on investments in CTP NV EO are ranked lower than 8 (%) of all global equities and portfolios over the last 90 days. Despite nearly uncertain basic indicators, CTP NV may actually be approaching a critical reversion point that can send shares even higher in April 2025.

Pair Trading with H2O Retailing and CTP NV

The main advantage of trading using opposite H2O Retailing and CTP NV positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if H2O Retailing 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 H2O Retailing and CTP NV EO 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 Insider Screener module to find insiders across different sectors to evaluate their impact on performance.