Correlation Between CLPS and Computer Task
Can any of the company-specific risk be diversified away by investing in both CLPS and Computer Task 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 CLPS and Computer Task into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between CLPS Inc and Computer Task Group, you can compare the effects of market volatilities on CLPS and Computer Task 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 CLPS with a short position of Computer Task. Check out your portfolio center. Please also check ongoing floating volatility patterns of CLPS and Computer Task.
Diversification Opportunities for CLPS and Computer Task
0.2 | Correlation Coefficient |
Modest diversification
The 3 months correlation between CLPS and Computer is 0.2. Overlapping area represents the amount of risk that can be diversified away by holding CLPS Inc and Computer Task Group in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Computer Task Group and CLPS 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 CLPS Inc are associated (or correlated) with Computer Task. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Computer Task Group has no effect on the direction of CLPS i.e., CLPS and Computer Task go up and down completely randomly.
Pair Corralation between CLPS and Computer Task
Given the investment horizon of 90 days CLPS Inc is expected to generate 1.71 times more return on investment than Computer Task. However, CLPS is 1.71 times more volatile than Computer Task Group. It trades about 0.03 of its potential returns per unit of risk. Computer Task Group is currently generating about 0.03 per unit of risk. If you would invest 88.00 in CLPS Inc on August 24, 2024 and sell it today you would earn a total of 25.00 from holding CLPS Inc or generate 28.41% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 31.85% |
| Values | Daily Returns |
CLPS Inc vs. Computer Task Group
Performance |
| Timeline |
| CLPS Inc |
| Computer Task Group |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Very Weak
CLPS and Computer Task Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with CLPS and Computer Task
The main advantage of trading using opposite CLPS and Computer Task positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if CLPS position performs unexpectedly, Computer Task 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 Computer Task will offset losses from the drop in Computer Task's long position.| CLPS vs. Concentrix | CLPS vs. Accenture plc | CLPS vs. International Business Machines | CLPS vs. Cognizant Technology Solutions |
| Computer Task vs. The Hackett Group | Computer Task vs. CSP Inc | Computer Task vs. Nayax | Computer Task vs. Formula Systems 1985 |
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 Sectors module to list of equity sectors categorizing publicly traded companies based on their primary business activities.
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