Correlation Between CLST Holdings and Premier Products

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

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

Diversification Opportunities for CLST Holdings and Premier Products

0.0

Correlation Coefficient

CLST Holdings  Premier Products

Pay attention - limited upside

The 3 months correlation between CLST and Premier is 0.0. Overlapping area represents the amount of risk that can be diversified away by holding CLST Holdings and Premier Products Group in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Premier Products and CLST Holdings 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 CLST Holdings are associated (or correlated) with Premier Products. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Premier Products has no effect on the direction of CLST Holdings i.e., CLST Holdings and Premier Products go up and down completely randomly.

Pair Corralation between CLST Holdings and Premier Products

Given the investment horizon of 90 days CLST Holdings is expected to generate 1.87 times more return on investment than Premier Products. However, CLST Holdings is 1.87 times more volatile than Premier Products Group. It trades about 0.12 of its potential returns per unit of risk. Premier Products Group is currently generating about 0.06 per unit of risk. If you would invest  1.70  in CLST Holdings on September 8, 2024 and sell it today you would earn a total of  0.70  from holding CLST Holdings or generate 41.18% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Flat
Strength	Insignificant
Accuracy	81.41%
Values	Daily Returns

CLST Holdings  vs.  Premier Products Group

CLST Holdings

Risk-Adjusted Performance

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Very Weak

Over the last 90 days CLST Holdings has generated negative risk-adjusted returns adding no value to investors with long positions. Despite fairly unfluctuating technical indicators, CLST Holdings may actually be approaching a critical reversion point that can send shares even higher in January 2025.

Premier Products

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Premier Products Group has generated negative risk-adjusted returns adding no value to investors with long positions. Despite nearly stable basic indicators, Premier Products is not utilizing all of its potentials. The latest stock price disturbance, may contribute to mid-run losses for the stockholders.

Pair Trading with CLST Holdings and Premier Products

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

The idea behind CLST Holdings and Premier Products Group 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 Sectors module to list of equity sectors categorizing publicly traded companies based on their primary business activities.