Correlation Between Crowdstrike Holdings and United States

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

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

Diversification Opportunities for Crowdstrike Holdings and United States

0.87

Correlation Coefficient

Crowdstrike Holdings  United States

Very poor diversification

The 3 months correlation between Crowdstrike and United is 0.87. Overlapping area represents the amount of risk that can be diversified away by holding Crowdstrike Holdings and United States Lime in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on United States Lime 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 United States. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of United States Lime has no effect on the direction of Crowdstrike Holdings i.e., Crowdstrike Holdings and United States go up and down completely randomly.

Pair Corralation between Crowdstrike Holdings and United States

Given the investment horizon of 90 days Crowdstrike Holdings is expected to generate 1.19 times more return on investment than United States. However, Crowdstrike Holdings is 1.19 times more volatile than United States Lime. It trades about 0.04 of its potential returns per unit of risk. United States Lime is currently generating about -0.41 per unit of risk. If you would invest  35,360  in Crowdstrike Holdings on October 10, 2024 and sell it today you would earn a total of  633.00  from holding Crowdstrike Holdings or generate 1.79% return on investment over 90 days.

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

Crowdstrike Holdings  vs.  United States Lime

Crowdstrike Holdings

Risk-Adjusted Performance

7 of 100

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Crowdstrike Holdings are ranked lower than 7 (%) 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.

United States Lime

Risk-Adjusted Performance

8 of 100

OK

Compared to the overall equity markets, risk-adjusted returns on investments in United States Lime are ranked lower than 8 (%) of all global equities and portfolios over the last 90 days. In spite of very unsteady essential indicators, United States displayed solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Crowdstrike Holdings and United States

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

The idea behind Crowdstrike Holdings and United States Lime 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 Price Transformation module to use Price Transformation models to analyze the depth of different equity instruments across global markets.