Correlation Between Biopower Operations and CLST Holdings

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

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

Diversification Opportunities for Biopower Operations and CLST Holdings

0.0

Correlation Coefficient

Biopower Operations  CLST Holdings

Pay attention - limited upside

The 3 months correlation between Biopower and CLST is 0.0. Overlapping area represents the amount of risk that can be diversified away by holding Biopower Operations Corp and CLST Holdings in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on CLST Holdings and Biopower Operations 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 Biopower Operations Corp 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 Biopower Operations i.e., Biopower Operations and CLST Holdings go up and down completely randomly.

Pair Corralation between Biopower Operations and CLST Holdings

If you would invest  2.10  in CLST Holdings on December 19, 2024 and sell it today you would earn a total of  1.40  from holding CLST Holdings or generate 66.67% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Flat
Strength	Insignificant
Accuracy	93.75%
Values	Daily Returns

Biopower Operations Corp  vs.  CLST Holdings

Biopower Operations Corp

Risk-Adjusted Performance

Very Weak

Over the last 90 days Biopower Operations Corp has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of very healthy basic indicators, Biopower Operations is not utilizing all of its potentials. The recent stock price disarray, may contribute to short-term losses for the investors.

CLST Holdings

Risk-Adjusted Performance

Good

Compared to the overall equity markets, risk-adjusted returns on investments in CLST Holdings are ranked lower than 13 (%) 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 Biopower Operations and CLST Holdings

The main advantage of trading using opposite Biopower Operations and CLST Holdings positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Biopower Operations 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 Biopower Operations Corp 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 Piotroski F Score module to get Piotroski F Score based on the binary analysis strategy of nine different fundamentals.