Correlation Between CLPS and BigBearai Holdings

Can any of the company-specific risk be diversified away by investing in both CLPS and BigBearai 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 CLPS and BigBearai Holdings into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between CLPS Inc and BigBearai Holdings, you can compare the effects of market volatilities on CLPS and BigBearai 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 CLPS with a short position of BigBearai Holdings. Check out your portfolio center. Please also check ongoing floating volatility patterns of CLPS and BigBearai Holdings.

Diversification Opportunities for CLPS and BigBearai Holdings

0.62

Correlation Coefficient

CLPS  BigBearai Holdings

Poor diversification

The 3 months correlation between CLPS and BigBearai is 0.62. Overlapping area represents the amount of risk that can be diversified away by holding CLPS Inc and BigBearai Holdings in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on BigBearai Holdings and CLPS 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 CLPS Inc are associated (or correlated) with BigBearai Holdings. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of BigBearai Holdings has no effect on the direction of CLPS i.e., CLPS and BigBearai Holdings go up and down completely randomly.

Pair Corralation between CLPS and BigBearai Holdings

Given the investment horizon of 90 days CLPS Inc is expected to generate 0.56 times more return on investment than BigBearai Holdings. However, CLPS Inc is 1.79 times less risky than BigBearai Holdings. It trades about -0.11 of its potential returns per unit of risk. BigBearai Holdings is currently generating about -0.17 per unit of risk. If you would invest  100.00  in CLPS Inc on February 6, 2024 and sell it today you would lose (8.00) from holding CLPS Inc or give up 8.0% of portfolio value over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Significant
Accuracy	100.0%
Values	Daily Returns

CLPS Inc  vs.  BigBearai Holdings

CLPS Inc

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days CLPS Inc has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of comparatively stable basic indicators, CLPS is not utilizing all of its potentials. The latest stock price uproar, may contribute to short-horizon losses for the private investors.

BigBearai Holdings

Risk-Adjusted Performance

1 of 100

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in BigBearai Holdings are ranked lower than 1 (%) of all global equities and portfolios over the last 90 days. Despite fairly unsteady basic indicators, BigBearai Holdings demonstrated solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with CLPS and BigBearai Holdings

The main advantage of trading using opposite CLPS and BigBearai Holdings positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if CLPS position performs unexpectedly, BigBearai 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 BigBearai Holdings will offset losses from the drop in BigBearai Holdings' long position.

The idea behind CLPS Inc and BigBearai Holdings pairs trading is to make the combined position market-neutral, meaning the overall market's direction will not affect its win or loss (or potential downside or upside). This can be achieved by designing a pairs trade with two highly correlated stocks or equities that operate in a similar space or sector, making it possible to obtain profits through simple and relatively low-risk investment.

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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 Investing Opportunities module to build portfolios using our predefined set of ideas and optimize them against your investing preferences.