Correlation Between CSP Steel and SVI Public

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

By analyzing existing cross correlation between CSP Steel Center and SVI Public, you can compare the effects of market volatilities on CSP Steel and SVI Public 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 CSP Steel with a short position of SVI Public. Check out your portfolio center. Please also check ongoing floating volatility patterns of CSP Steel and SVI Public.

Diversification Opportunities for CSP Steel and SVI Public

-0.44

Correlation Coefficient

CSP Steel  SVI Public

Very good diversification

The 3 months correlation between CSP and SVI is -0.44. Overlapping area represents the amount of risk that can be diversified away by holding CSP Steel Center and SVI Public in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on SVI Public and CSP Steel 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 CSP Steel Center are associated (or correlated) with SVI Public. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of SVI Public has no effect on the direction of CSP Steel i.e., CSP Steel and SVI Public go up and down completely randomly.

Pair Corralation between CSP Steel and SVI Public

Assuming the 90 days trading horizon CSP Steel Center is expected to under-perform the SVI Public. In addition to that, CSP Steel is 1.29 times more volatile than SVI Public. It trades about -0.1 of its total potential returns per unit of risk. SVI Public is currently generating about 0.03 per unit of volatility. If you would invest  725.00  in SVI Public on December 27, 2024 and sell it today you would earn a total of  15.00  from holding SVI Public or generate 2.07% return on investment over 90 days.

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

CSP Steel Center  vs.  SVI Public

CSP Steel Center

Risk-Adjusted Performance

Very Weak

Over the last 90 days CSP Steel Center has generated negative risk-adjusted returns adding no value to investors with long positions. Despite conflicting performance in the last few months, the Stock's basic indicators remain quite persistent which may send shares a bit higher in April 2025. The latest mess may also be a sign of long-standing up-swing for the company institutional investors.

SVI Public

Risk-Adjusted Performance

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in SVI Public are ranked lower than 2 (%) of all global equities and portfolios over the last 90 days. Despite quite persistent forward indicators, SVI Public is not utilizing all of its potentials. The latest stock price mess, may contribute to short-term losses for the institutional investors.

Pair Trading with CSP Steel and SVI Public

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

The idea behind CSP Steel Center and SVI Public 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 Cryptocurrency Center module to build and monitor diversified portfolio of extremely risky digital assets and cryptocurrency.