Correlation Between Crowdstrike Holdings and Lixil Group
Can any of the company-specific risk be diversified away by investing in both Crowdstrike Holdings and Lixil Group 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 Lixil Group into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Crowdstrike Holdings and Lixil Group Corp, you can compare the effects of market volatilities on Crowdstrike Holdings and Lixil Group 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 Lixil Group. Check out your portfolio center. Please also check ongoing floating volatility patterns of Crowdstrike Holdings and Lixil Group.
Diversification Opportunities for Crowdstrike Holdings and Lixil Group
-0.53 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Crowdstrike and Lixil is -0.53. Overlapping area represents the amount of risk that can be diversified away by holding Crowdstrike Holdings and Lixil Group Corp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Lixil Group Corp 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 Lixil Group. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Lixil Group Corp has no effect on the direction of Crowdstrike Holdings i.e., Crowdstrike Holdings and Lixil Group go up and down completely randomly.
Pair Corralation between Crowdstrike Holdings and Lixil Group
Given the investment horizon of 90 days Crowdstrike Holdings is expected to generate 1.89 times more return on investment than Lixil Group. However, Crowdstrike Holdings is 1.89 times more volatile than Lixil Group Corp. It trades about 0.15 of its potential returns per unit of risk. Lixil Group Corp is currently generating about -0.03 per unit of risk. If you would invest 27,728 in Crowdstrike Holdings on August 30, 2024 and sell it today you would earn a total of 7,031 from holding Crowdstrike Holdings or generate 25.36% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Crowdstrike Holdings vs. Lixil Group Corp
Performance |
| Timeline |
| Crowdstrike Holdings |
| Lixil Group Corp |
Crowdstrike Holdings and Lixil Group Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Crowdstrike Holdings and Lixil Group
The main advantage of trading using opposite Crowdstrike Holdings and Lixil Group positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Crowdstrike Holdings position performs unexpectedly, Lixil Group 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 Lixil Group will offset losses from the drop in Lixil Group's long position.| Crowdstrike Holdings vs. Adobe Systems Incorporated | Crowdstrike Holdings vs. Palantir Technologies Class | Crowdstrike Holdings vs. Zscaler | Crowdstrike Holdings vs. Okta Inc |
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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 Risk-Return Analysis module to view associations between returns expected from investment and the risk you assume.
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