Correlation Between CLPS and Whitbread Plc

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Can any of the company-specific risk be diversified away by investing in both CLPS and Whitbread Plc 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 Whitbread Plc into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between CLPS Inc and Whitbread plc, you can compare the effects of market volatilities on CLPS and Whitbread Plc 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 Whitbread Plc. Check out your portfolio center. Please also check ongoing floating volatility patterns of CLPS and Whitbread Plc.

Diversification Opportunities for CLPS and Whitbread Plc

0.16
  Correlation Coefficient

Average diversification

The 3 months correlation between CLPS and Whitbread is 0.16. Overlapping area represents the amount of risk that can be diversified away by holding CLPS Inc and Whitbread plc in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Whitbread plc 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 Whitbread Plc. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Whitbread plc has no effect on the direction of CLPS i.e., CLPS and Whitbread Plc go up and down completely randomly.

Pair Corralation between CLPS and Whitbread Plc

Given the investment horizon of 90 days CLPS is expected to generate 2.69 times less return on investment than Whitbread Plc. In addition to that, CLPS is 1.62 times more volatile than Whitbread plc. It trades about 0.01 of its total potential returns per unit of risk. Whitbread plc is currently generating about 0.03 per unit of volatility. If you would invest  3,158  in Whitbread plc on October 11, 2024 and sell it today you would earn a total of  438.00  from holding Whitbread plc or generate 13.87% return on investment over 90 days.
Time Period3 Months [change]
DirectionMoves Together 
StrengthInsignificant
Accuracy64.04%
ValuesDaily Returns

CLPS Inc  vs.  Whitbread plc

 Performance 
       Timeline  
CLPS Inc 

Risk-Adjusted Performance

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Over the last 90 days CLPS Inc has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of latest unsteady performance, the Stock's basic indicators remain stable and the newest uproar on Wall Street may also be a sign of mid-term gains for the firm private investors.
Whitbread plc 

Risk-Adjusted Performance

0 of 100

 
Weak
 
Strong
Very Weak
Over the last 90 days Whitbread plc has generated negative risk-adjusted returns adding no value to investors with long positions. Despite latest weak performance, the Stock's fundamental indicators remain stable and the current disturbance on Wall Street may also be a sign of long-run gains for the company stockholders.

CLPS and Whitbread Plc Volatility Contrast

   Predicted Return Density   
       Returns  

Pair Trading with CLPS and Whitbread Plc

The main advantage of trading using opposite CLPS and Whitbread Plc positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if CLPS position performs unexpectedly, Whitbread Plc 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 Whitbread Plc will offset losses from the drop in Whitbread Plc's long position.
The idea behind CLPS Inc and Whitbread plc 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 Pattern Recognition module to use different Pattern Recognition models to time the market across multiple global exchanges.

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