Correlation Between Kaspien Holdings and Cleartronic

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

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

Diversification Opportunities for Kaspien Holdings and Cleartronic

-0.28

Correlation Coefficient

Kaspien Holdings  Cleartronic

Very good diversification

The 3 months correlation between Kaspien and Cleartronic is -0.28. Overlapping area represents the amount of risk that can be diversified away by holding Kaspien Holdings and Cleartronic in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Cleartronic and Kaspien Holdings 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 Kaspien Holdings are associated (or correlated) with Cleartronic. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Cleartronic has no effect on the direction of Kaspien Holdings i.e., Kaspien Holdings and Cleartronic go up and down completely randomly.

Pair Corralation between Kaspien Holdings and Cleartronic

Given the investment horizon of 90 days Kaspien Holdings is expected to under-perform the Cleartronic. But the pink sheet apears to be less risky and, when comparing its historical volatility, Kaspien Holdings is 3.5 times less risky than Cleartronic. The pink sheet trades about -0.06 of its potential returns per unit of risk. The Cleartronic is currently generating about 0.07 of returns per unit of risk over similar time horizon. If you would invest  3.00  in Cleartronic on October 10, 2024 and sell it today you would lose (1.73) from holding Cleartronic or give up 57.67% of portfolio value over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Insignificant
Accuracy	21.13%
Values	Daily Returns

Kaspien Holdings  vs.  Cleartronic

Kaspien Holdings

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Kaspien Holdings has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of very healthy basic indicators, Kaspien Holdings is not utilizing all of its potentials. The current stock price disarray, may contribute to short-term losses for the investors.

Cleartronic

Risk-Adjusted Performance

7 of 100

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Cleartronic are ranked lower than 7 (%) of all global equities and portfolios over the last 90 days. Despite fairly abnormal basic indicators, Cleartronic demonstrated solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Kaspien Holdings and Cleartronic

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

The idea behind Kaspien Holdings and Cleartronic 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 Equity Search module to search for actively traded equities including funds and ETFs from over 30 global markets.