Correlation Between Consensus Cloud and Optiva

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

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

Diversification Opportunities for Consensus Cloud and Optiva

-0.72

Correlation Coefficient

Consensus Cloud  Optiva

Pay attention - limited upside

The 3 months correlation between Consensus and Optiva is -0.72. Overlapping area represents the amount of risk that can be diversified away by holding Consensus Cloud Solutions and Optiva Inc in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Optiva Inc and Consensus Cloud 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 Consensus Cloud Solutions are associated (or correlated) with Optiva. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Optiva Inc has no effect on the direction of Consensus Cloud i.e., Consensus Cloud and Optiva go up and down completely randomly.

Pair Corralation between Consensus Cloud and Optiva

Given the investment horizon of 90 days Consensus Cloud Solutions is expected to generate 5.8 times more return on investment than Optiva. However, Consensus Cloud is 5.8 times more volatile than Optiva Inc. It trades about 0.16 of its potential returns per unit of risk. Optiva Inc is currently generating about -0.12 per unit of risk. If you would invest  1,660  in Consensus Cloud Solutions on July 8, 2024 and sell it today you would earn a total of  557.00  from holding Consensus Cloud Solutions or generate 33.55% return on investment over 90 days.

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

Consensus Cloud Solutions  vs.  Optiva Inc

Consensus Cloud Solutions

Risk-Adjusted Performance

12 of 100

Good

Compared to the overall equity markets, risk-adjusted returns on investments in Consensus Cloud Solutions are ranked lower than 12 (%) of all global equities and portfolios over the last 90 days. Despite fairly unsteady basic indicators, Consensus Cloud demonstrated solid returns over the last few months and may actually be approaching a breakup point.

Optiva Inc

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Optiva Inc has generated negative risk-adjusted returns adding no value to investors with long positions. Despite nearly stable technical and fundamental indicators, Optiva is not utilizing all of its potentials. The current stock price disturbance, may contribute to mid-run losses for the stockholders.

Pair Trading with Consensus Cloud and Optiva

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

The idea behind Consensus Cloud Solutions and Optiva Inc 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 Fundamental Analysis module to view fundamental data based on most recent published financial statements.