Correlation Between CSP and Cantaloupe
Can any of the company-specific risk be diversified away by investing in both CSP and Cantaloupe 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 CSP and Cantaloupe into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between CSP Inc and Cantaloupe, you can compare the effects of market volatilities on CSP and Cantaloupe 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 CSP with a short position of Cantaloupe. Check out your portfolio center. Please also check ongoing floating volatility patterns of CSP and Cantaloupe.
Diversification Opportunities for CSP and Cantaloupe
0.01 | Correlation Coefficient |
Significant diversification
The 3 months correlation between CSP and Cantaloupe is 0.01. Overlapping area represents the amount of risk that can be diversified away by holding CSP Inc and Cantaloupe in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Cantaloupe and CSP 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 CSP Inc are associated (or correlated) with Cantaloupe. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Cantaloupe has no effect on the direction of CSP i.e., CSP and Cantaloupe go up and down completely randomly.
Pair Corralation between CSP and Cantaloupe
Given the investment horizon of 90 days CSP Inc is expected to generate 2.26 times more return on investment than Cantaloupe. However, CSP is 2.26 times more volatile than Cantaloupe. It trades about 0.06 of its potential returns per unit of risk. Cantaloupe is currently generating about 0.03 per unit of risk. If you would invest 1,121 in CSP Inc on November 5, 2024 and sell it today you would earn a total of 877.00 from holding CSP Inc or generate 78.23% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
CSP Inc vs. Cantaloupe
Performance |
| Timeline |
| CSP Inc |
| Cantaloupe |
CSP and Cantaloupe Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with CSP and Cantaloupe
The main advantage of trading using opposite CSP and Cantaloupe positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if CSP position performs unexpectedly, Cantaloupe 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 Cantaloupe will offset losses from the drop in Cantaloupe's long position.| CSP vs. The Hackett Group | CSP vs. Nayax | CSP vs. Formula Systems 1985 | CSP vs. Information Services Group |
| Cantaloupe vs. FiscalNote Holdings | Cantaloupe vs. CLPS Inc | Cantaloupe vs. Formula Systems 1985 | Cantaloupe vs. CSP Inc |
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 Fundamentals Comparison module to compare fundamentals across multiple equities to find investing opportunities.
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