Correlation Between Whitbread Plc and CLPS
Can any of the company-specific risk be diversified away by investing in both Whitbread Plc and CLPS 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 Whitbread Plc and CLPS into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Whitbread plc and CLPS Inc, you can compare the effects of market volatilities on Whitbread Plc and CLPS 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 Whitbread Plc with a short position of CLPS. Check out your portfolio center. Please also check ongoing floating volatility patterns of Whitbread Plc and CLPS.
Diversification Opportunities for Whitbread Plc and CLPS
0.15 | Correlation Coefficient |
Average diversification
The 3 months correlation between Whitbread and CLPS is 0.15. Overlapping area represents the amount of risk that can be diversified away by holding Whitbread plc and CLPS Inc in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on CLPS Inc and Whitbread Plc 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 Whitbread plc are associated (or correlated) with CLPS. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of CLPS Inc has no effect on the direction of Whitbread Plc i.e., Whitbread Plc and CLPS go up and down completely randomly.
Pair Corralation between Whitbread Plc and CLPS
Assuming the 90 days horizon Whitbread plc is expected to under-perform the CLPS. But the pink sheet apears to be less risky and, when comparing its historical volatility, Whitbread plc is 3.61 times less risky than CLPS. The pink sheet trades about -0.22 of its potential returns per unit of risk. The CLPS Inc is currently generating about -0.05 of returns per unit of risk over similar time horizon. If you would invest 117.00 in CLPS Inc on October 10, 2024 and sell it today you would lose (4.00) from holding CLPS Inc or give up 3.42% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Whitbread plc vs. CLPS Inc
Performance |
| Timeline |
| Whitbread plc |
| CLPS Inc |
Whitbread Plc and CLPS Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Whitbread Plc and CLPS
The main advantage of trading using opposite Whitbread Plc and CLPS positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Whitbread Plc position performs unexpectedly, CLPS 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 CLPS will offset losses from the drop in CLPS's long position.| Whitbread Plc vs. CLPS Inc | Whitbread Plc vs. Griffon | Whitbread Plc vs. Getty Images Holdings | Whitbread Plc vs. Western Acquisition Ventures |
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 Portfolio Volatility module to check portfolio volatility and analyze historical return density to properly model market risk.
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