Correlation Between V and CSE Global

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

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

Diversification Opportunities for V and CSE Global

0.0

Correlation Coefficient

V  CSE Global

Pay attention - limited upside

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

Pair Corralation between V and CSE Global

Given the investment horizon of 90 days V Group is expected to under-perform the CSE Global. In addition to that, V is 5.42 times more volatile than CSE Global Limited. It trades about -0.13 of its total potential returns per unit of risk. CSE Global Limited is currently generating about 0.19 per unit of volatility. If you would invest  30.00  in CSE Global Limited on September 13, 2024 and sell it today you would earn a total of  9.00  from holding CSE Global Limited or generate 30.0% return on investment over 90 days.

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

V Group  vs.  CSE Global Limited

V Group

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days V Group has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of fragile performance in the last few months, the Stock's forward indicators remain rather sound which may send shares a bit higher in January 2025. The latest tumult may also be a sign of longer-term up-swing for the firm shareholders.

CSE Global Limited

Risk-Adjusted Performance

14 of 100

Good

Compared to the overall equity markets, risk-adjusted returns on investments in CSE Global Limited are ranked lower than 14 (%) of all global equities and portfolios over the last 90 days. Despite nearly weak forward-looking indicators, CSE Global reported solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with V and CSE Global

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

The idea behind V Group and CSE Global Limited 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 Portfolio Volatility module to check portfolio volatility and analyze historical return density to properly model market risk.