Correlation Between USCorp and CLST Holdings

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

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

Diversification Opportunities for USCorp and CLST Holdings

0.0

Correlation Coefficient

USCorp  CLST Holdings

Pay attention - limited upside

The 3 months correlation between USCorp and CLST is 0.0. Overlapping area represents the amount of risk that can be diversified away by holding USCorp and CLST Holdings in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on CLST Holdings and USCorp 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 USCorp are associated (or correlated) with CLST Holdings. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of CLST Holdings has no effect on the direction of USCorp i.e., USCorp and CLST Holdings go up and down completely randomly.

Pair Corralation between USCorp and CLST Holdings

If you would invest  4.90  in CLST Holdings on September 7, 2024 and sell it today you would lose (2.50) from holding CLST Holdings or give up 51.02% of portfolio value over 90 days.

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

USCorp  vs.  CLST Holdings

USCorp

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days USCorp has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of comparatively stable fundamental indicators, USCorp is not utilizing all of its potentials. The current stock price uproar, may contribute to short-horizon losses for the private investors.

CLST Holdings

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days CLST Holdings has generated negative risk-adjusted returns adding no value to investors with long positions. Despite fairly uncertain technical indicators, CLST Holdings may actually be approaching a critical reversion point that can send shares even higher in January 2025.

Pair Trading with USCorp and CLST Holdings

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

The idea behind USCorp and CLST Holdings 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.

Check out your portfolio center.

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 Price Ceiling Movement module to calculate and plot Price Ceiling Movement for different equity instruments.