Correlation Between Castellum and Data Storage

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

By analyzing existing cross correlation between Castellum and Data Storage Corp, you can compare the effects of market volatilities on Castellum and Data Storage 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 Data Storage. Check out your portfolio center. Please also check ongoing floating volatility patterns of Castellum and Data Storage.

Diversification Opportunities for Castellum and Data Storage

-0.05

Correlation Coefficient

Castellum  Data Storage

Good diversification

The 3 months correlation between Castellum and Data is -0.05. Overlapping area represents the amount of risk that can be diversified away by holding Castellum and Data Storage Corp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Data Storage Corp 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 Data Storage. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Data Storage Corp has no effect on the direction of Castellum i.e., Castellum and Data Storage go up and down completely randomly.

Pair Corralation between Castellum and Data Storage

Considering the 90-day investment horizon Castellum is expected to under-perform the Data Storage. In addition to that, Castellum is 3.0 times more volatile than Data Storage Corp. It trades about -0.08 of its total potential returns per unit of risk. Data Storage Corp is currently generating about -0.06 per unit of volatility. If you would invest  418.00  in Data Storage Corp on December 29, 2024 and sell it today you would lose (64.00) from holding Data Storage Corp or give up 15.31% of portfolio value over 90 days.

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

Castellum  vs.  Data Storage Corp

Castellum

Risk-Adjusted Performance

Very Weak

Over the last 90 days Castellum has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of inconsistent performance in the last few months, the Stock's basic indicators remain very healthy which may send shares a bit higher in April 2025. The recent disarray may also be a sign of long period up-swing for the firm investors.

Data Storage Corp

Risk-Adjusted Performance

Very Weak

Over the last 90 days Data Storage Corp has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of unfluctuating performance in the last few months, the Stock's basic indicators remain comparatively stable which may send shares a bit higher in April 2025. The newest uproar may also be a sign of mid-term up-swing for the firm private investors.

Pair Trading with Castellum and Data Storage

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

The idea behind Castellum and Data Storage Corp 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.