Correlation Between CSP and NeoMagic
Can any of the company-specific risk be diversified away by investing in both CSP and NeoMagic 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 NeoMagic into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between CSP Inc and NeoMagic, you can compare the effects of market volatilities on CSP and NeoMagic 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 NeoMagic. Check out your portfolio center. Please also check ongoing floating volatility patterns of CSP and NeoMagic.
Diversification Opportunities for CSP and NeoMagic
Excellent diversification
The 3 months correlation between CSP and NeoMagic is -0.52. Overlapping area represents the amount of risk that can be diversified away by holding CSP Inc and NeoMagic in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on NeoMagic 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 NeoMagic. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of NeoMagic has no effect on the direction of CSP i.e., CSP and NeoMagic go up and down completely randomly.
Pair Corralation between CSP and NeoMagic
If you would invest 1,239 in CSP Inc on August 30, 2024 and sell it today you would earn a total of 343.00 from holding CSP Inc or generate 27.68% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 4.35% |
| Values | Daily Returns |
CSP Inc vs. NeoMagic
Performance |
| Timeline |
| CSP Inc |
| NeoMagic |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Very Weak
CSP and NeoMagic Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with CSP and NeoMagic
The main advantage of trading using opposite CSP and NeoMagic positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if CSP position performs unexpectedly, NeoMagic 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 NeoMagic will offset losses from the drop in NeoMagic'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 Odds Of Bankruptcy module to get analysis of equity chance of financial distress in the next 2 years.
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