Correlation Between Crowdstrike Holdings and Nuvei Corp

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

By analyzing existing cross correlation between Crowdstrike Holdings and Nuvei Corp, you can compare the effects of market volatilities on Crowdstrike Holdings and Nuvei Corp 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 Nuvei Corp. Check out your portfolio center. Please also check ongoing floating volatility patterns of Crowdstrike Holdings and Nuvei Corp.

Diversification Opportunities for Crowdstrike Holdings and Nuvei Corp

0.85

Correlation Coefficient

Crowdstrike Holdings  Nuvei Corp

Very poor diversification

The 3 months correlation between Crowdstrike and Nuvei is 0.85. Overlapping area represents the amount of risk that can be diversified away by holding Crowdstrike Holdings and Nuvei Corp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Nuvei Corp 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 Nuvei Corp. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Nuvei Corp has no effect on the direction of Crowdstrike Holdings i.e., Crowdstrike Holdings and Nuvei Corp go up and down completely randomly.

Pair Corralation between Crowdstrike Holdings and Nuvei Corp

Given the investment horizon of 90 days Crowdstrike Holdings is expected to generate 0.79 times more return on investment than Nuvei Corp. However, Crowdstrike Holdings is 1.26 times less risky than Nuvei Corp. It trades about 0.1 of its potential returns per unit of risk. Nuvei Corp is currently generating about 0.04 per unit of risk. If you would invest  10,457  in Crowdstrike Holdings on September 19, 2024 and sell it today you would earn a total of  24,461  from holding Crowdstrike Holdings or generate 233.92% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Strong
Accuracy	95.97%
Values	Daily Returns

Crowdstrike Holdings  vs.  Nuvei Corp

Crowdstrike Holdings

Risk-Adjusted Performance

11 of 100

Good

Compared to the overall equity markets, risk-adjusted returns on investments in Crowdstrike Holdings are ranked lower than 11 (%) of all global equities and portfolios over the last 90 days. In spite of rather unsteady basic indicators, Crowdstrike Holdings exhibited solid returns over the last few months and may actually be approaching a breakup point.

Nuvei Corp

Risk-Adjusted Performance

0 of 100

Good

Over the last 90 days Nuvei Corp has generated negative risk-adjusted returns adding no value to investors with long positions. Despite fairly strong technical and fundamental indicators, Nuvei Corp is not utilizing all of its potentials. The latest stock price confusion, may contribute to short-horizon losses for the traders.

Pair Trading with Crowdstrike Holdings and Nuvei Corp

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

The idea behind Crowdstrike Holdings and Nuvei Corp 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 Diagnostics module to use generated alerts and portfolio events aggregator to diagnose current holdings.