Correlation Between Soluna Holdings and CLPS

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

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

Diversification Opportunities for Soluna Holdings and CLPS

0.32

Correlation Coefficient

Soluna Holdings  CLPS

Weak diversification

The 3 months correlation between Soluna and CLPS is 0.32. Overlapping area represents the amount of risk that can be diversified away by holding Soluna Holdings and CLPS Inc in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on CLPS Inc and Soluna 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 Soluna Holdings 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 Soluna Holdings i.e., Soluna Holdings and CLPS go up and down completely randomly.

Pair Corralation between Soluna Holdings and CLPS

Given the investment horizon of 90 days Soluna Holdings is expected to generate 2.24 times more return on investment than CLPS. However, Soluna Holdings is 2.24 times more volatile than CLPS Inc. It trades about 0.0 of its potential returns per unit of risk. CLPS Inc is currently generating about 0.01 per unit of risk. If you would invest  1,075  in Soluna Holdings on October 9, 2024 and sell it today you would lose (819.00) from holding Soluna Holdings or give up 76.19% of portfolio value over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Very Weak
Accuracy	99.8%
Values	Daily Returns

Soluna Holdings  vs.  CLPS Inc

Soluna Holdings

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Soluna Holdings has generated negative risk-adjusted returns adding no value to investors with long positions. Despite fairly strong basic indicators, Soluna Holdings is not utilizing all of its potentials. The recent stock price confusion, may contribute to short-horizon losses for the traders.

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 Soluna Holdings and CLPS

The main advantage of trading using opposite Soluna Holdings and CLPS positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Soluna Holdings 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 Soluna Holdings 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 Headlines Timeline module to stay connected to all market stories and filter out noise. Drill down to analyze hype elasticity.