Correlation Between CSE Global and CLPS

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

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

Diversification Opportunities for CSE Global and CLPS

-0.23

Correlation Coefficient

CSE Global  CLPS

Very good diversification

The 3 months correlation between CSE and CLPS is -0.23. Overlapping area represents the amount of risk that can be diversified away by holding CSE Global Limited and CLPS Inc in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on CLPS Inc and CSE Global 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 CSE Global Limited are associated (or correlated) with CLPS. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of CLPS Inc has no effect on the direction of CSE Global i.e., CSE Global and CLPS go up and down completely randomly.

Pair Corralation between CSE Global and CLPS

Assuming the 90 days horizon CSE Global Limited is expected to generate 1.41 times more return on investment than CLPS. However, CSE Global is 1.41 times more volatile than CLPS Inc. It trades about 0.06 of its potential returns per unit of risk. CLPS Inc is currently generating about 0.04 per unit of risk. If you would invest  35.00  in CSE Global Limited on December 27, 2024 and sell it today you would earn a total of  4.00  from holding CSE Global Limited or generate 11.43% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Insignificant
Accuracy	96.67%
Values	Daily Returns

CSE Global Limited  vs.  CLPS Inc

CSE Global Limited

Risk-Adjusted Performance

Insignificant

Compared to the overall equity markets, risk-adjusted returns on investments in CSE Global Limited are ranked lower than 4 (%) of all global equities and portfolios over the last 90 days. Despite nearly weak forward-looking indicators, CSE Global reported solid returns over the last few months and may actually be approaching a breakup point.

CLPS Inc

Risk-Adjusted Performance

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in CLPS Inc are ranked lower than 2 (%) of all global equities and portfolios over the last 90 days. In spite of comparatively unsteady basic indicators, CLPS may actually be approaching a critical reversion point that can send shares even higher in April 2025.

Pair Trading with CSE Global and CLPS

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

The idea behind CSE Global Limited and CLPS 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 Stock Screener module to find equities using a custom stock filter or screen asymmetry in trading patterns, price, volume, or investment outlook..