Correlation Between Crowdstrike Holdings and BASE
Can any of the company-specific risk be diversified away by investing in both Crowdstrike Holdings and BASE 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 Crowdstrike Holdings and BASE into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Crowdstrike Holdings and BASE Inc, you can compare the effects of market volatilities on Crowdstrike Holdings and BASE 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 Crowdstrike Holdings with a short position of BASE. Check out your portfolio center. Please also check ongoing floating volatility patterns of Crowdstrike Holdings and BASE.
Diversification Opportunities for Crowdstrike Holdings and BASE
-0.39 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Crowdstrike and BASE is -0.39. Overlapping area represents the amount of risk that can be diversified away by holding Crowdstrike Holdings and BASE Inc in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on BASE Inc and Crowdstrike Holdings 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 Crowdstrike Holdings are associated (or correlated) with BASE. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of BASE Inc has no effect on the direction of Crowdstrike Holdings i.e., Crowdstrike Holdings and BASE go up and down completely randomly.
Pair Corralation between Crowdstrike Holdings and BASE
Given the investment horizon of 90 days Crowdstrike Holdings is expected to generate 1.02 times less return on investment than BASE. But when comparing it to its historical volatility, Crowdstrike Holdings is 2.09 times less risky than BASE. It trades about 0.4 of its potential returns per unit of risk. BASE Inc is currently generating about 0.19 of returns per unit of risk over similar time horizon. If you would invest 126.00 in BASE Inc on August 28, 2024 and sell it today you would earn a total of 24.00 from holding BASE Inc or generate 19.05% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Crowdstrike Holdings vs. BASE Inc
Performance |
| Timeline |
| Crowdstrike Holdings |
| BASE Inc |
Crowdstrike Holdings and BASE Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Crowdstrike Holdings and BASE
The main advantage of trading using opposite Crowdstrike Holdings and BASE positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Crowdstrike Holdings position performs unexpectedly, BASE 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 BASE will offset losses from the drop in BASE's long position.| Crowdstrike Holdings vs. GigaCloud Technology Class | Crowdstrike Holdings vs. Arqit Quantum | Crowdstrike Holdings vs. Telos Corp | Crowdstrike Holdings vs. Cemtrex |
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 Watchlist Optimization module to optimize watchlists to build efficient portfolios or rebalance existing positions based on the mean-variance optimization algorithm.
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