Correlation Between Crowdstrike Holdings and Connecticut Light

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

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

Diversification Opportunities for Crowdstrike Holdings and Connecticut Light

-0.72

Correlation Coefficient

Crowdstrike Holdings  Connecticut Light

Pay attention - limited upside

The 3 months correlation between Crowdstrike and Connecticut is -0.72. Overlapping area represents the amount of risk that can be diversified away by holding Crowdstrike Holdings and The Connecticut Light in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Connecticut Light and Crowdstrike 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 Crowdstrike Holdings are associated (or correlated) with Connecticut Light. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Connecticut Light has no effect on the direction of Crowdstrike Holdings i.e., Crowdstrike Holdings and Connecticut Light go up and down completely randomly.

Pair Corralation between Crowdstrike Holdings and Connecticut Light

Given the investment horizon of 90 days Crowdstrike Holdings is expected to generate 0.75 times more return on investment than Connecticut Light. However, Crowdstrike Holdings is 1.34 times less risky than Connecticut Light. It trades about 0.1 of its potential returns per unit of risk. The Connecticut Light is currently generating about 0.02 per unit of risk. If you would invest  10,942  in Crowdstrike Holdings on October 26, 2024 and sell it today you would earn a total of  26,550  from holding Crowdstrike Holdings or generate 242.64% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Weak
Accuracy	73.89%
Values	Daily Returns

Crowdstrike Holdings  vs.  The Connecticut Light

Crowdstrike Holdings

Risk-Adjusted Performance

12 of 100

Good

Compared to the overall equity markets, risk-adjusted returns on investments in Crowdstrike Holdings are ranked lower than 12 (%) of all global equities and portfolios over the last 90 days. In spite of rather conflicting basic indicators, Crowdstrike Holdings exhibited solid returns over the last few months and may actually be approaching a breakup point.

Connecticut Light

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days The Connecticut Light has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of latest weak performance, the Stock's technical indicators remain healthy and the recent disarray on Wall Street may also be a sign of long period gains for the firm investors.

Pair Trading with Crowdstrike Holdings and Connecticut Light

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

The idea behind Crowdstrike Holdings and The Connecticut Light 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 Theme Ratings module to determine theme ratings based on digital equity recommendations. Macroaxis theme ratings are based on combination of fundamental analysis and risk-adjusted market performance.