Correlation Between 61747YEU5 and CTS

Can any of the company-specific risk be diversified away by investing in both 61747YEU5 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 61747YEU5 and CTS into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between MS 4889 20 JUL 33 and CTS Corporation, you can compare the effects of market volatilities on 61747YEU5 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 61747YEU5 with a short position of CTS. Check out your portfolio center. Please also check ongoing floating volatility patterns of 61747YEU5 and CTS.

Diversification Opportunities for 61747YEU5 and CTS

-0.69

Correlation Coefficient

61747YEU5  CTS

Excellent diversification

The 3 months correlation between 61747YEU5 and CTS is -0.69. Overlapping area represents the amount of risk that can be diversified away by holding MS 4889 20 JUL 33 and CTS Corp. in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on CTS Corporation and 61747YEU5 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 MS 4889 20 JUL 33 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 61747YEU5 i.e., 61747YEU5 and CTS go up and down completely randomly.

Pair Corralation between 61747YEU5 and CTS

Assuming the 90 days trading horizon MS 4889 20 JUL 33 is expected to generate 0.42 times more return on investment than CTS. However, MS 4889 20 JUL 33 is 2.38 times less risky than CTS. It trades about -0.02 of its potential returns per unit of risk. CTS Corporation is currently generating about -0.22 per unit of risk. If you would invest  9,675  in MS 4889 20 JUL 33 on December 23, 2024 and sell it today you would lose (96.00) from holding MS 4889 20 JUL 33 or give up 0.99% of portfolio value over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Weak
Accuracy	98.39%
Values	Daily Returns

MS 4889 20 JUL 33  vs.  CTS Corp.

MS 4889 20

Risk-Adjusted Performance

Very Weak

Over the last 90 days MS 4889 20 JUL 33 has generated negative risk-adjusted returns adding no value to investors with long positions. Despite somewhat strong basic indicators, 61747YEU5 is not utilizing all of its potentials. The latest stock price disturbance, may contribute to short-term losses for the investors.

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 61747YEU5 and CTS

The main advantage of trading using opposite 61747YEU5 and CTS positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if 61747YEU5 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 MS 4889 20 JUL 33 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 Sectors module to list of equity sectors categorizing publicly traded companies based on their primary business activities.