Correlation Between Neonode and CTS

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

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

Diversification Opportunities for Neonode and CTS

-0.15

Correlation Coefficient

Neonode  CTS

Good diversification

The 3 months correlation between Neonode and CTS is -0.15. Overlapping area represents the amount of risk that can be diversified away by holding Neonode and CTS Corp. in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on CTS Corporation and Neonode 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 Neonode are associated (or correlated) with CTS. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of CTS Corporation has no effect on the direction of Neonode i.e., Neonode and CTS go up and down completely randomly.

Pair Corralation between Neonode and CTS

Given the investment horizon of 90 days Neonode is expected to generate 2.3 times more return on investment than CTS. However, Neonode is 2.3 times more volatile than CTS Corporation. It trades about 0.04 of its potential returns per unit of risk. CTS Corporation is currently generating about -0.19 per unit of risk. If you would invest  830.00  in Neonode on December 24, 2024 and sell it today you would earn a total of  42.00  from holding Neonode or generate 5.06% return on investment over 90 days.

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

Neonode  vs.  CTS Corp.

Neonode

Risk-Adjusted Performance

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in Neonode are ranked lower than 3 (%) of all global equities and portfolios over the last 90 days. In spite of very inconsistent basic indicators, Neonode may actually be approaching a critical reversion point that can send shares even higher in April 2025.

CTS Corporation

Risk-Adjusted Performance

Very Weak

Over the last 90 days CTS Corporation has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of uncertain performance in the last few months, the Stock's basic indicators remain comparatively stable which may send shares a bit higher in April 2025. The newest uproar may also be a sign of mid-term up-swing for the firm private investors.

Pair Trading with Neonode and CTS

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

The idea behind Neonode and CTS Corporation 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 Companies Directory module to evaluate performance of over 100,000 Stocks, Funds, and ETFs against different fundamentals.