Correlation Between CTT Systems and Impact Coatings
Can any of the company-specific risk be diversified away by investing in both CTT Systems and Impact Coatings 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 CTT Systems and Impact Coatings into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between CTT Systems AB and Impact Coatings publ, you can compare the effects of market volatilities on CTT Systems and Impact Coatings 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 CTT Systems with a short position of Impact Coatings. Check out your portfolio center. Please also check ongoing floating volatility patterns of CTT Systems and Impact Coatings.
Diversification Opportunities for CTT Systems and Impact Coatings
0.52 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between CTT and Impact is 0.52. Overlapping area represents the amount of risk that can be diversified away by holding CTT Systems AB and Impact Coatings publ in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Impact Coatings publ and CTT Systems 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 CTT Systems AB are associated (or correlated) with Impact Coatings. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Impact Coatings publ has no effect on the direction of CTT Systems i.e., CTT Systems and Impact Coatings go up and down completely randomly.
Pair Corralation between CTT Systems and Impact Coatings
Assuming the 90 days trading horizon CTT Systems is expected to generate 1.03 times less return on investment than Impact Coatings. But when comparing it to its historical volatility, CTT Systems AB is 1.25 times less risky than Impact Coatings. It trades about 0.1 of its potential returns per unit of risk. Impact Coatings publ is currently generating about 0.08 of returns per unit of risk over similar time horizon. If you would invest 333.00 in Impact Coatings publ on April 23, 2025 and sell it today you would earn a total of 57.00 from holding Impact Coatings publ or generate 17.12% return on investment over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Together |
Strength | Weak |
Accuracy | 100.0% |
Values | Daily Returns |
CTT Systems AB vs. Impact Coatings publ
Performance |
Timeline |
CTT Systems AB |
Impact Coatings publ |
CTT Systems and Impact Coatings Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with CTT Systems and Impact Coatings
The main advantage of trading using opposite CTT Systems and Impact Coatings positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if CTT Systems position performs unexpectedly, Impact Coatings 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 Impact Coatings will offset losses from the drop in Impact Coatings' long position.CTT Systems vs. Enea AB | CTT Systems vs. BTS Group AB | CTT Systems vs. CellaVision AB | CTT Systems vs. Biotage AB |
Impact Coatings vs. CTT Systems AB | Impact Coatings vs. Proact IT Group | Impact Coatings vs. Rottneros AB | Impact Coatings vs. Mekonomen AB |
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 ETF Categories module to list of ETF categories grouped based on various criteria, such as the investment strategy or type of investments.
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