Correlation Between Crowdstrike Holdings and 50249AAD5

Can any of the company-specific risk be diversified away by investing in both Crowdstrike Holdings and 50249AAD5 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 50249AAD5 into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between Crowdstrike Holdings and LYB INTERNATIONAL FINANCE, you can compare the effects of market volatilities on Crowdstrike Holdings and 50249AAD5 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 50249AAD5. Check out your portfolio center. Please also check ongoing floating volatility patterns of Crowdstrike Holdings and 50249AAD5.

Diversification Opportunities for Crowdstrike Holdings and 50249AAD5

-0.51

Correlation Coefficient

Crowdstrike Holdings  50249AAD5

Excellent diversification

The 3 months correlation between Crowdstrike and 50249AAD5 is -0.51. Overlapping area represents the amount of risk that can be diversified away by holding Crowdstrike Holdings and LYB INTERNATIONAL FINANCE in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on LYB INTERNATIONAL FINANCE 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 50249AAD5. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of LYB INTERNATIONAL FINANCE has no effect on the direction of Crowdstrike Holdings i.e., Crowdstrike Holdings and 50249AAD5 go up and down completely randomly.

Pair Corralation between Crowdstrike Holdings and 50249AAD5

Given the investment horizon of 90 days Crowdstrike Holdings is expected to generate 1.47 times more return on investment than 50249AAD5. However, Crowdstrike Holdings is 1.47 times more volatile than LYB INTERNATIONAL FINANCE. It trades about 0.16 of its potential returns per unit of risk. LYB INTERNATIONAL FINANCE is currently generating about 0.07 per unit of risk. If you would invest  30,132  in Crowdstrike Holdings on October 26, 2024 and sell it today you would earn a total of  7,638  from holding Crowdstrike Holdings or generate 25.35% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Very Weak
Accuracy	98.31%
Values	Daily Returns

Crowdstrike Holdings  vs.  LYB INTERNATIONAL FINANCE

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.

LYB INTERNATIONAL FINANCE

Risk-Adjusted Performance

5 of 100

Modest

Compared to the overall equity markets, risk-adjusted returns on investments in LYB INTERNATIONAL FINANCE are ranked lower than 5 (%) of all global equities and portfolios over the last 90 days. Despite somewhat unfluctuating basic indicators, 50249AAD5 may actually be approaching a critical reversion point that can send shares even higher in February 2025.

Pair Trading with Crowdstrike Holdings and 50249AAD5

The main advantage of trading using opposite Crowdstrike Holdings and 50249AAD5 positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Crowdstrike Holdings position performs unexpectedly, 50249AAD5 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 50249AAD5 will offset losses from the drop in 50249AAD5's long position.

The idea behind Crowdstrike Holdings and LYB INTERNATIONAL FINANCE 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.

Check out your portfolio center.

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 AI Portfolio Architect module to use AI to generate optimal portfolios and find profitable investment opportunities.