Correlation Between Consensus Cloud and CiT

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

By analyzing existing cross correlation between Consensus Cloud Solutions and CiT Inc, you can compare the effects of market volatilities on Consensus Cloud and CiT 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 Consensus Cloud with a short position of CiT. Check out your portfolio center. Please also check ongoing floating volatility patterns of Consensus Cloud and CiT.

Diversification Opportunities for Consensus Cloud and CiT

-0.36

Correlation Coefficient

Consensus Cloud  CiT

Very good diversification

The 3 months correlation between Consensus and CiT is -0.36. Overlapping area represents the amount of risk that can be diversified away by holding Consensus Cloud Solutions and CiT Inc in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on CiT Inc and Consensus Cloud 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 Consensus Cloud Solutions are associated (or correlated) with CiT. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of CiT Inc has no effect on the direction of Consensus Cloud i.e., Consensus Cloud and CiT go up and down completely randomly.

Pair Corralation between Consensus Cloud and CiT

Given the investment horizon of 90 days Consensus Cloud Solutions is expected to generate 1.05 times more return on investment than CiT. However, Consensus Cloud is 1.05 times more volatile than CiT Inc. It trades about 0.05 of its potential returns per unit of risk. CiT Inc is currently generating about 0.02 per unit of risk. If you would invest  2,339  in Consensus Cloud Solutions on September 3, 2024 and sell it today you would earn a total of  156.00  from holding Consensus Cloud Solutions or generate 6.67% return on investment over 90 days.

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

Consensus Cloud Solutions  vs.  CiT Inc

Consensus Cloud Solutions

Risk-Adjusted Performance

3 of 100

Insignificant

Compared to the overall equity markets, risk-adjusted returns on investments in Consensus Cloud Solutions are ranked lower than 3 (%) of all global equities and portfolios over the last 90 days. Despite fairly unsteady basic indicators, Consensus Cloud may actually be approaching a critical reversion point that can send shares even higher in January 2025.

CiT Inc

Risk-Adjusted Performance

1 of 100

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in CiT Inc are ranked lower than 1 (%) of all global equities and portfolios over the last 90 days. In spite of comparatively stable basic indicators, CiT is not utilizing all of its potentials. The latest stock price uproar, may contribute to short-horizon losses for the private investors.

Pair Trading with Consensus Cloud and CiT

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

The idea behind Consensus Cloud Solutions and CiT Inc 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 Portfolio Suggestion module to get suggestions outside of your existing asset allocation including your own model portfolios.