Correlation Between CSP and Nayax

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

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

Diversification Opportunities for CSP and Nayax

0.6

Correlation Coefficient

CSP  Nayax

Poor diversification

The 3 months correlation between CSP and Nayax is 0.6. Overlapping area represents the amount of risk that can be diversified away by holding CSP Inc and Nayax in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Nayax and CSP 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 Inc are associated (or correlated) with Nayax. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Nayax has no effect on the direction of CSP i.e., CSP and Nayax go up and down completely randomly.

Pair Corralation between CSP and Nayax

Given the investment horizon of 90 days CSP is expected to generate 5.3 times less return on investment than Nayax. In addition to that, CSP is 1.67 times more volatile than Nayax. It trades about 0.02 of its total potential returns per unit of risk. Nayax is currently generating about 0.17 per unit of volatility. If you would invest  2,778  in Nayax on December 27, 2024 and sell it today you would earn a total of  724.00  from holding Nayax or generate 26.06% return on investment over 90 days.

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

CSP Inc  vs.  Nayax

CSP Inc

Risk-Adjusted Performance

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in CSP Inc are ranked lower than 1 (%) of all global equities and portfolios over the last 90 days. Despite fairly strong basic indicators, CSP is not utilizing all of its potentials. The current stock price confusion, may contribute to short-horizon losses for the traders.

Nayax

Risk-Adjusted Performance

Good

Compared to the overall equity markets, risk-adjusted returns on investments in Nayax are ranked lower than 13 (%) of all global equities and portfolios over the last 90 days. In spite of fairly fragile basic indicators, Nayax showed solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with CSP and Nayax

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

The idea behind CSP Inc and Nayax 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 Bond Analysis module to evaluate and analyze corporate bonds as a potential investment for your portfolios..