Correlation Between Cornerstone Strategic and Power

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

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

Diversification Opportunities for Cornerstone Strategic and Power

0.88

Correlation Coefficient

Cornerstone Strategic  Power

Very poor diversification

The 3 months correlation between Cornerstone and Power is 0.88. Overlapping area represents the amount of risk that can be diversified away by holding Cornerstone Strategic Value and Power in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Power and Cornerstone Strategic 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 Cornerstone Strategic Value are associated (or correlated) with Power. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Power has no effect on the direction of Cornerstone Strategic i.e., Cornerstone Strategic and Power go up and down completely randomly.

Pair Corralation between Cornerstone Strategic and Power

Considering the 90-day investment horizon Cornerstone Strategic is expected to generate 3.89 times less return on investment than Power. But when comparing it to its historical volatility, Cornerstone Strategic Value is 1.29 times less risky than Power. It trades about 0.1 of its potential returns per unit of risk. Power is currently generating about 0.31 of returns per unit of risk over similar time horizon. If you would invest  5,286  in Power on July 12, 2025 and sell it today you would earn a total of  943.00  from holding Power or generate 17.84% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Strong
Accuracy	98.44%
Values	Daily Returns

Cornerstone Strategic Value  vs.  Power

Cornerstone Strategic

Risk-Adjusted Performance

Good

Compared to the overall equity markets, risk-adjusted returns on investments in Cornerstone Strategic Value are ranked lower than 8 (%) of all funds and portfolios of funds over the last 90 days. In spite of very healthy essential indicators, Cornerstone Strategic is not utilizing all of its potentials. The latest stock price disarray, may contribute to short-term losses for the investors.

Power

Risk-Adjusted Performance

Solid

Compared to the overall equity markets, risk-adjusted returns on investments in Power are ranked lower than 24 (%) of all global equities and portfolios over the last 90 days. In spite of very unfluctuating basic indicators, Power displayed solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Cornerstone Strategic and Power

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

The idea behind Cornerstone Strategic Value and Power 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.