Correlation Between CLPS and Castellum
Can any of the company-specific risk be diversified away by investing in both CLPS and Castellum 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 Castellum into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between CLPS Inc and Castellum, you can compare the effects of market volatilities on CLPS and Castellum 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 Castellum. Check out your portfolio center. Please also check ongoing floating volatility patterns of CLPS and Castellum.
Diversification Opportunities for CLPS and Castellum
Very good diversification
The 3 months correlation between CLPS and Castellum is -0.27. Overlapping area represents the amount of risk that can be diversified away by holding CLPS Inc and Castellum in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Castellum 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 Castellum. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Castellum has no effect on the direction of CLPS i.e., CLPS and Castellum go up and down completely randomly.
Pair Corralation between CLPS and Castellum
Given the investment horizon of 90 days CLPS Inc is expected to under-perform the Castellum. But the stock apears to be less risky and, when comparing its historical volatility, CLPS Inc is 1.15 times less risky than Castellum. The stock trades about -0.06 of its potential returns per unit of risk. The Castellum is currently generating about 0.0 of returns per unit of risk over similar time horizon. If you would invest 17.00 in Castellum on August 24, 2024 and sell it today you would lose (1.00) from holding Castellum or give up 5.88% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
CLPS Inc vs. Castellum
Performance |
| Timeline |
| CLPS Inc |
| Castellum |
CLPS and Castellum Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with CLPS and Castellum
The main advantage of trading using opposite CLPS and Castellum positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if CLPS position performs unexpectedly, Castellum 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 Castellum will offset losses from the drop in Castellum's long position.The idea behind CLPS Inc and Castellum 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.| Castellum vs. Flint Telecom Group | Castellum vs. Datametrex AI Limited | Castellum vs. TTEC Holdings | Castellum vs. Digatrade Financial Corp |
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 Pattern Recognition module to use different Pattern Recognition models to time the market across multiple global exchanges.
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