Correlation Between MTI WIRELESS and CTS Eventim

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

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

Diversification Opportunities for MTI WIRELESS and CTS Eventim

0.37

Correlation Coefficient

MTI WIRELESS  CTS Eventim

Weak diversification

The 3 months correlation between MTI and CTS is 0.37. Overlapping area represents the amount of risk that can be diversified away by holding MTI WIRELESS EDGE and CTS Eventim AG in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on CTS Eventim AG and MTI WIRELESS 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 MTI WIRELESS EDGE are associated (or correlated) with CTS Eventim. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of CTS Eventim AG has no effect on the direction of MTI WIRELESS i.e., MTI WIRELESS and CTS Eventim go up and down completely randomly.

Pair Corralation between MTI WIRELESS and CTS Eventim

Assuming the 90 days horizon MTI WIRELESS EDGE is expected to generate 3.41 times more return on investment than CTS Eventim. However, MTI WIRELESS is 3.41 times more volatile than CTS Eventim AG. It trades about 0.18 of its potential returns per unit of risk. CTS Eventim AG is currently generating about 0.3 per unit of risk. If you would invest  47.00  in MTI WIRELESS EDGE on October 20, 2024 and sell it today you would earn a total of  9.00  from holding MTI WIRELESS EDGE or generate 19.15% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Very Weak
Accuracy	94.44%
Values	Daily Returns

MTI WIRELESS EDGE  vs.  CTS Eventim AG

MTI WIRELESS EDGE

Risk-Adjusted Performance

4 of 100

Insignificant

Compared to the overall equity markets, risk-adjusted returns on investments in MTI WIRELESS EDGE are ranked lower than 4 (%) of all global equities and portfolios over the last 90 days. Despite nearly fragile basic indicators, MTI WIRELESS reported solid returns over the last few months and may actually be approaching a breakup point.

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. Despite latest fragile performance, the Stock's basic indicators remain stable and the current disturbance on Wall Street may also be a sign of long-run gains for the company stockholders.

Pair Trading with MTI WIRELESS and CTS Eventim

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

The idea behind MTI WIRELESS EDGE and CTS Eventim AG 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 Pattern Recognition module to use different Pattern Recognition models to time the market across multiple global exchanges.