Correlation Between CLPS and Entera Bio

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

By analyzing existing cross correlation between CLPS Inc and Entera Bio, you can compare the effects of market volatilities on CLPS and Entera Bio 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 Entera Bio. Check out your portfolio center. Please also check ongoing floating volatility patterns of CLPS and Entera Bio.

Diversification Opportunities for CLPS and Entera Bio

0.17

Correlation Coefficient

CLPS  Entera Bio

Average diversification

The 3 months correlation between CLPS and Entera is 0.17. Overlapping area represents the amount of risk that can be diversified away by holding CLPS Inc and Entera Bio in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Entera Bio 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 Entera Bio. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Entera Bio has no effect on the direction of CLPS i.e., CLPS and Entera Bio go up and down completely randomly.

Pair Corralation between CLPS and Entera Bio

Given the investment horizon of 90 days CLPS Inc is expected to generate 0.66 times more return on investment than Entera Bio. However, CLPS Inc is 1.51 times less risky than Entera Bio. It trades about 0.05 of its potential returns per unit of risk. Entera Bio is currently generating about -0.04 per unit of risk. If you would invest  113.00  in CLPS Inc on December 27, 2024 and sell it today you would earn a total of  7.74  from holding CLPS Inc or generate 6.85% return on investment over 90 days.

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

CLPS Inc  vs.  Entera Bio

CLPS Inc

Risk-Adjusted Performance

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in CLPS Inc are ranked lower than 3 (%) 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.

Entera Bio

Risk-Adjusted Performance

Very Weak

Over the last 90 days Entera Bio has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of latest weak performance, the Stock's basic indicators remain strong and the current disturbance on Wall Street may also be a sign of long term gains for the company investors.

Pair Trading with CLPS and Entera Bio

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

The idea behind CLPS Inc and Entera Bio 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 ETFs module to find actively traded Exchange Traded Funds (ETF) from around the world.