Correlation Between CSP and 9F
Can any of the company-specific risk be diversified away by investing in both CSP and 9F 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 9F into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between CSP Inc and 9F Inc, you can compare the effects of market volatilities on CSP and 9F 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 9F. Check out your portfolio center. Please also check ongoing floating volatility patterns of CSP and 9F.
Diversification Opportunities for CSP and 9F
Good diversification
The 3 months correlation between CSP and 9F is -0.18. Overlapping area represents the amount of risk that can be diversified away by holding CSP Inc and 9F Inc in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on 9F Inc 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 9F. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of 9F Inc has no effect on the direction of CSP i.e., CSP and 9F go up and down completely randomly.
Pair Corralation between CSP and 9F
Given the investment horizon of 90 days CSP Inc is expected to generate 1.12 times more return on investment than 9F. However, CSP is 1.12 times more volatile than 9F Inc. It trades about 0.21 of its potential returns per unit of risk. 9F Inc is currently generating about -0.12 per unit of risk. If you would invest 1,252 in CSP Inc on August 31, 2024 and sell it today you would earn a total of 330.00 from holding CSP Inc or generate 26.36% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
CSP Inc vs. 9F Inc
Performance |
| Timeline |
| CSP Inc |
| 9F Inc |
CSP and 9F Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with CSP and 9F
The main advantage of trading using opposite CSP and 9F positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if CSP position performs unexpectedly, 9F 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 9F will offset losses from the drop in 9F's long position.| CSP vs. The Hackett Group | CSP vs. Nayax | CSP vs. Formula Systems 1985 | CSP vs. Information Services Group |
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 Equity Valuation module to check real value of public entities based on technical and fundamental data.
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