Correlation Between Crowdstrike Holdings and Confluent
Can any of the company-specific risk be diversified away by investing in both Crowdstrike Holdings and Confluent 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 Confluent into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Crowdstrike Holdings and Confluent, you can compare the effects of market volatilities on Crowdstrike Holdings and Confluent 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 Confluent. Check out your portfolio center. Please also check ongoing floating volatility patterns of Crowdstrike Holdings and Confluent.
Diversification Opportunities for Crowdstrike Holdings and Confluent
0.89 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between Crowdstrike and Confluent is 0.89. Overlapping area represents the amount of risk that can be diversified away by holding Crowdstrike Holdings and Confluent in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Confluent 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 Confluent. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Confluent has no effect on the direction of Crowdstrike Holdings i.e., Crowdstrike Holdings and Confluent go up and down completely randomly.
Pair Corralation between Crowdstrike Holdings and Confluent
Given the investment horizon of 90 days Crowdstrike Holdings is expected to generate 1.46 times less return on investment than Confluent. But when comparing it to its historical volatility, Crowdstrike Holdings is 1.13 times less risky than Confluent. It trades about 0.04 of its potential returns per unit of risk. Confluent is currently generating about 0.06 of returns per unit of risk over similar time horizon. If you would invest 2,582 in Confluent on September 1, 2024 and sell it today you would earn a total of 502.00 from holding Confluent or generate 19.44% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Crowdstrike Holdings vs. Confluent
Performance |
| Timeline |
| Crowdstrike Holdings |
| Confluent |
Crowdstrike Holdings and Confluent Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Crowdstrike Holdings and Confluent
The main advantage of trading using opposite Crowdstrike Holdings and Confluent positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Crowdstrike Holdings position performs unexpectedly, Confluent 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 Confluent will offset losses from the drop in Confluent's long position.| Crowdstrike Holdings vs. Adobe Systems Incorporated | Crowdstrike Holdings vs. Palantir Technologies Class | Crowdstrike Holdings vs. Zscaler | Crowdstrike Holdings vs. Okta Inc |
| Confluent vs. DigitalOcean Holdings | Confluent vs. Doximity | Confluent vs. Gitlab Inc | Confluent vs. Global E Online |
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 Money Flow Index module to determine momentum by analyzing Money Flow Index and other technical indicators.
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