Correlation Between Azure Holding and CLST Holdings

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

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

Diversification Opportunities for Azure Holding and CLST Holdings

-0.47

Correlation Coefficient

Azure Holding  CLST Holdings

Very good diversification

The 3 months correlation between Azure and CLST is -0.47. Overlapping area represents the amount of risk that can be diversified away by holding Azure Holding Group and CLST Holdings in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on CLST Holdings and Azure Holding 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 Azure Holding Group are associated (or correlated) with CLST Holdings. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of CLST Holdings has no effect on the direction of Azure Holding i.e., Azure Holding and CLST Holdings go up and down completely randomly.

Pair Corralation between Azure Holding and CLST Holdings

Given the investment horizon of 90 days Azure Holding Group is expected to generate 1.0 times more return on investment than CLST Holdings. However, Azure Holding is 1.0 times more volatile than CLST Holdings. It trades about 0.2 of its potential returns per unit of risk. CLST Holdings is currently generating about 0.03 per unit of risk. If you would invest  3.50  in Azure Holding Group on September 18, 2024 and sell it today you would earn a total of  8.50  from holding Azure Holding Group or generate 242.86% return on investment over 90 days.

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

Azure Holding Group  vs.  CLST Holdings

Azure Holding Group

Risk-Adjusted Performance

15 of 100

Good

Compared to the overall equity markets, risk-adjusted returns on investments in Azure Holding Group are ranked lower than 15 (%) of all global equities and portfolios over the last 90 days. Despite fairly unfluctuating basic indicators, Azure Holding demonstrated solid returns over the last few months and may actually be approaching a breakup point.

CLST Holdings

Risk-Adjusted Performance

2 of 100

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in CLST Holdings are ranked lower than 2 (%) of all global equities and portfolios over the last 90 days. Despite fairly weak technical indicators, CLST Holdings demonstrated solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Azure Holding and CLST Holdings

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

The idea behind Azure Holding Group and CLST Holdings 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 Instant Ratings module to determine any equity ratings based on digital recommendations. Macroaxis instant equity ratings are based on combination of fundamental analysis and risk-adjusted market performance.