Correlation Between Crowdstrike Holdings and Western Magnesium
Can any of the company-specific risk be diversified away by investing in both Crowdstrike Holdings and Western Magnesium 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 Western Magnesium into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Crowdstrike Holdings and Western Magnesium, you can compare the effects of market volatilities on Crowdstrike Holdings and Western Magnesium 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 Western Magnesium. Check out your portfolio center. Please also check ongoing floating volatility patterns of Crowdstrike Holdings and Western Magnesium.
Diversification Opportunities for Crowdstrike Holdings and Western Magnesium
-0.77 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between Crowdstrike and Western is -0.77. Overlapping area represents the amount of risk that can be diversified away by holding Crowdstrike Holdings and Western Magnesium in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Western Magnesium 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 Western Magnesium. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Western Magnesium has no effect on the direction of Crowdstrike Holdings i.e., Crowdstrike Holdings and Western Magnesium go up and down completely randomly.
Pair Corralation between Crowdstrike Holdings and Western Magnesium
Given the investment horizon of 90 days Crowdstrike Holdings is expected to generate 0.11 times more return on investment than Western Magnesium. However, Crowdstrike Holdings is 9.32 times less risky than Western Magnesium. It trades about 0.4 of its potential returns per unit of risk. Western Magnesium is currently generating about -0.22 per unit of risk. If you would invest 30,132 in Crowdstrike Holdings on August 28, 2024 and sell it today you would earn a total of 6,236 from holding Crowdstrike Holdings or generate 20.7% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Crowdstrike Holdings vs. Western Magnesium
Performance |
| Timeline |
| Crowdstrike Holdings |
| Western Magnesium |
Crowdstrike Holdings and Western Magnesium Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Crowdstrike Holdings and Western Magnesium
The main advantage of trading using opposite Crowdstrike Holdings and Western Magnesium positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Crowdstrike Holdings position performs unexpectedly, Western Magnesium 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 Western Magnesium will offset losses from the drop in Western Magnesium's long position.| Crowdstrike Holdings vs. GigaCloud Technology Class | Crowdstrike Holdings vs. Arqit Quantum | Crowdstrike Holdings vs. Telos Corp | Crowdstrike Holdings vs. Cemtrex |
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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 Portfolio Center module to all portfolio management and optimization tools to improve performance of your portfolios.
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