Correlation Between Castellum and CLPS

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

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

Diversification Opportunities for Castellum and CLPS

-0.18

Correlation Coefficient

Castellum  CLPS

Good diversification

The 3 months correlation between Castellum and CLPS is -0.18. Overlapping area represents the amount of risk that can be diversified away by holding Castellum and CLPS Inc in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on CLPS Inc and Castellum 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 Castellum 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 Castellum i.e., Castellum and CLPS go up and down completely randomly.

Pair Corralation between Castellum and CLPS

Considering the 90-day investment horizon Castellum is expected to generate 5.65 times more return on investment than CLPS. However, Castellum is 5.65 times more volatile than CLPS Inc. It trades about 0.24 of its potential returns per unit of risk. CLPS Inc is currently generating about -0.03 per unit of risk. If you would invest  17.00  in Castellum on October 5, 2024 and sell it today you would earn a total of  160.00  from holding Castellum or generate 941.18% return on investment over 90 days.

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

Castellum  vs.  CLPS Inc

Castellum

Risk-Adjusted Performance

19 of 100

Solid

Compared to the overall equity markets, risk-adjusted returns on investments in Castellum are ranked lower than 19 (%) of all global equities and portfolios over the last 90 days. In spite of very inconsistent basic indicators, Castellum displayed solid returns over the last few months and may actually be approaching a breakup point.

CLPS Inc

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days CLPS Inc has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of latest unsteady performance, the Stock's basic indicators remain stable and the newest uproar on Wall Street may also be a sign of mid-term gains for the firm private investors.

Pair Trading with Castellum and CLPS

The main advantage of trading using opposite Castellum and CLPS positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Castellum 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 Castellum 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 Pair Correlation module to compare performance and examine fundamental relationship between any two equity instruments.