Correlation Between Vivendi SE and CTS Eventim

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

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

Diversification Opportunities for Vivendi SE and CTS Eventim

0.71

Correlation Coefficient

Vivendi SE  CTS Eventim

Poor diversification

The 3 months correlation between Vivendi and CTS is 0.71. Overlapping area represents the amount of risk that can be diversified away by holding Vivendi SE 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 Vivendi SE 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 Vivendi SE 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 Vivendi SE i.e., Vivendi SE and CTS Eventim go up and down completely randomly.

Pair Corralation between Vivendi SE and CTS Eventim

Assuming the 90 days trading horizon Vivendi SE is expected to under-perform the CTS Eventim. In addition to that, Vivendi SE is 4.98 times more volatile than CTS Eventim AG. It trades about -0.12 of its total potential returns per unit of risk. CTS Eventim AG is currently generating about -0.07 per unit of volatility. If you would invest  9,245  in CTS Eventim AG on September 27, 2024 and sell it today you would lose (990.00) from holding CTS Eventim AG or give up 10.71% of portfolio value over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Significant
Accuracy	96.83%
Values	Daily Returns

Vivendi SE  vs.  CTS Eventim AG

Vivendi SE

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Vivendi SE 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 January 2025. The newest uproar may also be a sign of mid-term up-swing for the firm private investors.

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 latest uncertain performance, the Stock's fundamental indicators remain stable and the newest uproar on Wall Street may also be a sign of mid-term gains for the firm private investors.

Pair Trading with Vivendi SE and CTS Eventim

The main advantage of trading using opposite Vivendi SE and CTS Eventim positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Vivendi SE 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 Vivendi SE 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.

Check out your portfolio center.

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 Positions Ratings module to determine portfolio positions ratings based on digital equity recommendations. Macroaxis instant position ratings are based on combination of fundamental analysis and risk-adjusted market performance.