Correlation Between CLPS and ARB IOT

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

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

Diversification Opportunities for CLPS and ARB IOT

-0.13

Correlation Coefficient

CLPS  ARB IOT

Good diversification

The 3 months correlation between CLPS and ARB is -0.13. Overlapping area represents the amount of risk that can be diversified away by holding CLPS Inc and ARB IOT Group in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on ARB IOT Group and CLPS 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 CLPS Inc are associated (or correlated) with ARB IOT. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of ARB IOT Group has no effect on the direction of CLPS i.e., CLPS and ARB IOT go up and down completely randomly.

Pair Corralation between CLPS and ARB IOT

Given the investment horizon of 90 days CLPS is expected to generate 11.03 times less return on investment than ARB IOT. But when comparing it to its historical volatility, CLPS Inc is 3.85 times less risky than ARB IOT. It trades about 0.04 of its potential returns per unit of risk. ARB IOT Group is currently generating about 0.11 of returns per unit of risk over similar time horizon. If you would invest  45.00  in ARB IOT Group on December 27, 2024 and sell it today you would earn a total of  23.00  from holding ARB IOT Group or generate 51.11% return on investment over 90 days.

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

CLPS Inc  vs.  ARB IOT Group

CLPS Inc

Risk-Adjusted Performance

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in CLPS Inc are ranked lower than 2 (%) of all global equities and portfolios over the last 90 days. In spite of comparatively unsteady basic indicators, CLPS may actually be approaching a critical reversion point that can send shares even higher in April 2025.

ARB IOT Group

Risk-Adjusted Performance

OK

Compared to the overall equity markets, risk-adjusted returns on investments in ARB IOT Group are ranked lower than 8 (%) of all global equities and portfolios over the last 90 days. Despite somewhat fragile fundamental drivers, ARB IOT sustained solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with CLPS and ARB IOT

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

The idea behind CLPS Inc and ARB IOT 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 Fundamentals Comparison module to compare fundamentals across multiple equities to find investing opportunities.