Correlation Between CSE Global and POSaBIT Systems
Can any of the company-specific risk be diversified away by investing in both CSE Global and POSaBIT Systems 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 CSE Global and POSaBIT Systems into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between CSE Global Limited and POSaBIT Systems Corp, you can compare the effects of market volatilities on CSE Global and POSaBIT Systems 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 CSE Global with a short position of POSaBIT Systems. Check out your portfolio center. Please also check ongoing floating volatility patterns of CSE Global and POSaBIT Systems.
Diversification Opportunities for CSE Global and POSaBIT Systems
0.36 | Correlation Coefficient |
Weak diversification
The 3 months correlation between CSE and POSaBIT is 0.36. Overlapping area represents the amount of risk that can be diversified away by holding CSE Global Limited and POSaBIT Systems Corp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on POSaBIT Systems Corp and CSE Global 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 CSE Global Limited are associated (or correlated) with POSaBIT Systems. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of POSaBIT Systems Corp has no effect on the direction of CSE Global i.e., CSE Global and POSaBIT Systems go up and down completely randomly.
Pair Corralation between CSE Global and POSaBIT Systems
Assuming the 90 days horizon CSE Global Limited is expected to generate 0.24 times more return on investment than POSaBIT Systems. However, CSE Global Limited is 4.19 times less risky than POSaBIT Systems. It trades about 0.21 of its potential returns per unit of risk. POSaBIT Systems Corp is currently generating about -0.03 per unit of risk. If you would invest 30.00 in CSE Global Limited on August 31, 2024 and sell it today you would earn a total of 3.00 from holding CSE Global Limited or generate 10.0% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
CSE Global Limited vs. POSaBIT Systems Corp
Performance |
| Timeline |
| CSE Global Limited |
| POSaBIT Systems Corp |
CSE Global and POSaBIT Systems Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with CSE Global and POSaBIT Systems
The main advantage of trading using opposite CSE Global and POSaBIT Systems positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if CSE Global position performs unexpectedly, POSaBIT Systems 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 POSaBIT Systems will offset losses from the drop in POSaBIT Systems' long position.| CSE Global vs. Appen Limited | CSE Global vs. Appen Limited | CSE Global vs. Deveron Corp | CSE Global vs. Capgemini SE ADR |
| POSaBIT Systems vs. The Travelers Companies | POSaBIT Systems vs. Walt Disney | POSaBIT Systems vs. Home Depot | POSaBIT Systems vs. Procter Gamble |
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 Sync Your Broker module to sync your existing holdings, watchlists, positions or portfolios from thousands of online brokerage services, banks, investment account aggregators and robo-advisors..
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