Correlation Between 90331HPL1 and Caspian Services

Can any of the company-specific risk be diversified away by investing in both 90331HPL1 and Caspian Services 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 90331HPL1 and Caspian Services into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between US BANK NATIONAL and Caspian Services, you can compare the effects of market volatilities on 90331HPL1 and Caspian Services 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 90331HPL1 with a short position of Caspian Services. Check out your portfolio center. Please also check ongoing floating volatility patterns of 90331HPL1 and Caspian Services.

Diversification Opportunities for 90331HPL1 and Caspian Services

-0.09

Correlation Coefficient

90331HPL1  Caspian Services

Good diversification

The 3 months correlation between 90331HPL1 and Caspian is -0.09. Overlapping area represents the amount of risk that can be diversified away by holding US BANK NATIONAL and Caspian Services in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Caspian Services and 90331HPL1 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 US BANK NATIONAL are associated (or correlated) with Caspian Services. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Caspian Services has no effect on the direction of 90331HPL1 i.e., 90331HPL1 and Caspian Services go up and down completely randomly.

Pair Corralation between 90331HPL1 and Caspian Services

If you would invest  0.40  in Caspian Services on September 23, 2024 and sell it today you would earn a total of  0.00  from holding Caspian Services or generate 0.0% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Insignificant
Accuracy	40.91%
Values	Daily Returns

US BANK NATIONAL  vs.  Caspian Services

US BANK NATIONAL

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days US BANK NATIONAL has generated negative risk-adjusted returns adding no value to investors with long positions. Despite somewhat strong basic indicators, 90331HPL1 is not utilizing all of its potentials. The current stock price disturbance, may contribute to short-term losses for the investors.

Caspian Services

Risk-Adjusted Performance

9 of 100

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Caspian Services are ranked lower than 9 (%) of all global equities and portfolios over the last 90 days. In spite of fairly fragile basic indicators, Caspian Services showed solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with 90331HPL1 and Caspian Services

The main advantage of trading using opposite 90331HPL1 and Caspian Services positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if 90331HPL1 position performs unexpectedly, Caspian Services 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 Caspian Services will offset losses from the drop in Caspian Services' long position.

The idea behind US BANK NATIONAL and Caspian Services 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 Risk-Return Analysis module to view associations between returns expected from investment and the risk you assume.