Correlation Between Crowdstrike Holdings and Qualys

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

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

Diversification Opportunities for Crowdstrike Holdings and Qualys

0.55

Correlation Coefficient

Crowdstrike Holdings  Qualys

Very weak diversification

The 3 months correlation between Crowdstrike and Qualys is 0.55. Overlapping area represents the amount of risk that can be diversified away by holding Crowdstrike Holdings and Qualys Inc in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Qualys Inc 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 Qualys. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Qualys Inc has no effect on the direction of Crowdstrike Holdings i.e., Crowdstrike Holdings and Qualys go up and down completely randomly.

Pair Corralation between Crowdstrike Holdings and Qualys

Given the investment horizon of 90 days Crowdstrike Holdings is expected to generate 1.83 times more return on investment than Qualys. However, Crowdstrike Holdings is 1.83 times more volatile than Qualys Inc. It trades about 0.03 of its potential returns per unit of risk. Qualys Inc is currently generating about -0.07 per unit of risk. If you would invest  34,931  in Crowdstrike Holdings on December 30, 2024 and sell it today you would earn a total of  780.00  from holding Crowdstrike Holdings or generate 2.23% return on investment over 90 days.

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

Crowdstrike Holdings  vs.  Qualys Inc

Crowdstrike Holdings

Risk-Adjusted Performance

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in Crowdstrike Holdings are ranked lower than 2 (%) of all global equities and portfolios over the last 90 days. In spite of rather sound basic indicators, Crowdstrike Holdings is not utilizing all of its potentials. The latest stock price tumult, may contribute to shorter-term losses for the shareholders.

Qualys Inc

Risk-Adjusted Performance

Very Weak

Over the last 90 days Qualys Inc has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of latest unsteady performance, the Stock's basic indicators remain stable and the newest uproar on Wall Street may also be a sign of mid-term gains for the firm private investors.

Pair Trading with Crowdstrike Holdings and Qualys

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

The idea behind Crowdstrike Holdings and Qualys Inc 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.