Correlation Between Confluent and Crowdstrike Holdings
Can any of the company-specific risk be diversified away by investing in both Confluent and Crowdstrike 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 Confluent and Crowdstrike Holdings into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Confluent and Crowdstrike Holdings, you can compare the effects of market volatilities on Confluent and Crowdstrike 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 Confluent with a short position of Crowdstrike Holdings. Check out your portfolio center. Please also check ongoing floating volatility patterns of Confluent and Crowdstrike Holdings.
Diversification Opportunities for Confluent and Crowdstrike Holdings
0.55 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Confluent and Crowdstrike is 0.55. Overlapping area represents the amount of risk that can be diversified away by holding Confluent and Crowdstrike Holdings in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Crowdstrike Holdings and Confluent 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 Confluent are associated (or correlated) with Crowdstrike Holdings. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Crowdstrike Holdings has no effect on the direction of Confluent i.e., Confluent and Crowdstrike Holdings go up and down completely randomly.
Pair Corralation between Confluent and Crowdstrike Holdings
Given the investment horizon of 90 days Confluent is expected to generate 1.55 times more return on investment than Crowdstrike Holdings. However, Confluent is 1.55 times more volatile than Crowdstrike Holdings. It trades about 0.11 of its potential returns per unit of risk. Crowdstrike Holdings is currently generating about 0.12 per unit of risk. If you would invest 2,260 in Confluent on November 27, 2024 and sell it today you would earn a total of 849.00 from holding Confluent or generate 37.57% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Confluent vs. Crowdstrike Holdings
Performance |
| Timeline |
| Confluent |
| Crowdstrike Holdings |
Confluent and Crowdstrike Holdings Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Confluent and Crowdstrike Holdings
The main advantage of trading using opposite Confluent and Crowdstrike Holdings positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Confluent position performs unexpectedly, Crowdstrike 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 Crowdstrike Holdings will offset losses from the drop in Crowdstrike Holdings' long position.| Confluent vs. DigitalOcean Holdings | Confluent vs. Doximity | Confluent vs. Gitlab Inc | Confluent vs. Global E Online |
| Crowdstrike Holdings vs. Adobe Systems Incorporated | Crowdstrike Holdings vs. Palantir Technologies Class | Crowdstrike Holdings vs. Zscaler | Crowdstrike Holdings vs. Okta Inc |
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 Stock Screener module to find equities using a custom stock filter or screen asymmetry in trading patterns, price, volume, or investment outlook..
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