Correlation Between NYSE Composite and Crowdstrike Holdings
Can any of the company-specific risk be diversified away by investing in both NYSE Composite and Crowdstrike Holdings 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 NYSE Composite and Crowdstrike Holdings into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between NYSE Composite and Crowdstrike Holdings, you can compare the effects of market volatilities on NYSE Composite and Crowdstrike Holdings 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 NYSE Composite with a short position of Crowdstrike Holdings. Check out your portfolio center. Please also check ongoing floating volatility patterns of NYSE Composite and Crowdstrike Holdings.
Diversification Opportunities for NYSE Composite and Crowdstrike Holdings
0.88 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between NYSE and Crowdstrike is 0.88. Overlapping area represents the amount of risk that can be diversified away by holding NYSE Composite and Crowdstrike Holdings in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Crowdstrike Holdings and NYSE Composite 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 NYSE Composite are associated (or correlated) with Crowdstrike Holdings. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Crowdstrike Holdings has no effect on the direction of NYSE Composite i.e., NYSE Composite and Crowdstrike Holdings go up and down completely randomly.
Pair Corralation between NYSE Composite and Crowdstrike Holdings
Assuming the 90 days trading horizon NYSE Composite is expected to generate 4.83 times less return on investment than Crowdstrike Holdings. But when comparing it to its historical volatility, NYSE Composite is 3.79 times less risky than Crowdstrike Holdings. It trades about 0.08 of its potential returns per unit of risk. Crowdstrike Holdings is currently generating about 0.1 of returns per unit of risk over similar time horizon. If you would invest 11,383 in Crowdstrike Holdings on August 27, 2024 and sell it today you would earn a total of 25,843 from holding Crowdstrike Holdings or generate 227.03% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
NYSE Composite vs. Crowdstrike Holdings
Performance |
| Timeline |
NYSE Composite and Crowdstrike Holdings Volatility Contrast
Predicted Return Density |
| Returns |
NYSE Composite
Pair trading matchups for NYSE Composite
Crowdstrike Holdings
Pair trading matchups for Crowdstrike Holdings
Pair Trading with NYSE Composite and Crowdstrike Holdings
The main advantage of trading using opposite NYSE Composite and Crowdstrike Holdings positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if NYSE Composite position performs unexpectedly, Crowdstrike Holdings 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 Crowdstrike Holdings will offset losses from the drop in Crowdstrike Holdings' long position.| NYSE Composite vs. Hooker Furniture | NYSE Composite vs. Hudson Pacific Properties | NYSE Composite vs. Canlan Ice Sports | NYSE Composite vs. Boston Properties |
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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 Volatility Analysis module to get historical volatility and risk analysis based on latest market data.
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