Correlation Between Stem and Crowdstrike Holdings
Can any of the company-specific risk be diversified away by investing in both Stem 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 Stem and Crowdstrike Holdings into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Stem Inc and Crowdstrike Holdings, you can compare the effects of market volatilities on Stem 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 Stem with a short position of Crowdstrike Holdings. Check out your portfolio center. Please also check ongoing floating volatility patterns of Stem and Crowdstrike Holdings.
Diversification Opportunities for Stem and Crowdstrike Holdings
-0.21 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Stem and Crowdstrike is -0.21. Overlapping area represents the amount of risk that can be diversified away by holding Stem Inc and Crowdstrike Holdings in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Crowdstrike Holdings and Stem 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 Stem Inc 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 Stem i.e., Stem and Crowdstrike Holdings go up and down completely randomly.
Pair Corralation between Stem and Crowdstrike Holdings
Given the investment horizon of 90 days Stem is expected to generate 4.57 times less return on investment than Crowdstrike Holdings. In addition to that, Stem is 3.16 times more volatile than Crowdstrike Holdings. It trades about 0.02 of its total potential returns per unit of risk. Crowdstrike Holdings is currently generating about 0.28 per unit of volatility. If you would invest 30,313 in Crowdstrike Holdings on September 2, 2024 and sell it today you would earn a total of 4,284 from holding Crowdstrike Holdings or generate 14.13% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Stem Inc vs. Crowdstrike Holdings
Performance |
| Timeline |
| Stem Inc |
| Crowdstrike Holdings |
Stem and Crowdstrike Holdings Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Stem and Crowdstrike Holdings
The main advantage of trading using opposite Stem and Crowdstrike Holdings positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Stem 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.| Stem vs. Palo Alto Networks | Stem vs. Crowdstrike Holdings | Stem vs. Cloudflare | Stem vs. Palantir Technologies Class |
| Crowdstrike Holdings vs. Adobe Systems Incorporated | Crowdstrike Holdings vs. Palantir Technologies Class | Crowdstrike Holdings vs. Zscaler | Crowdstrike Holdings vs. Okta 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 Instant Ratings module to determine any equity ratings based on digital recommendations. Macroaxis instant equity ratings are based on combination of fundamental analysis and risk-adjusted market performance.
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