Correlation Between CLPS and BrightSpring Health

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

By analyzing existing cross correlation between CLPS Inc and BrightSpring Health Services,, you can compare the effects of market volatilities on CLPS and BrightSpring Health 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 BrightSpring Health. Check out your portfolio center. Please also check ongoing floating volatility patterns of CLPS and BrightSpring Health.

Diversification Opportunities for CLPS and BrightSpring Health

0.07

Correlation Coefficient

CLPS  BrightSpring Health

Significant diversification

The 3 months correlation between CLPS and BrightSpring is 0.07. Overlapping area represents the amount of risk that can be diversified away by holding CLPS Inc and BrightSpring Health Services, in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on BrightSpring Health 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 BrightSpring Health. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of BrightSpring Health has no effect on the direction of CLPS i.e., CLPS and BrightSpring Health go up and down completely randomly.

Pair Corralation between CLPS and BrightSpring Health

Given the investment horizon of 90 days CLPS Inc is expected to generate 1.11 times more return on investment than BrightSpring Health. However, CLPS is 1.11 times more volatile than BrightSpring Health Services,. It trades about -0.02 of its potential returns per unit of risk. BrightSpring Health Services, is currently generating about -0.04 per unit of risk. If you would invest  96.00  in CLPS Inc on May 16, 2025 and sell it today you would lose (4.50) from holding CLPS Inc or give up 4.69% of portfolio value over 90 days.

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

CLPS Inc  vs.  BrightSpring Health Services,

CLPS Inc

Risk-Adjusted Performance

Weakest

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 newest stock price uproar, may contribute to short-horizon losses for the private investors.

BrightSpring Health

Risk-Adjusted Performance

Weakest

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

Pair Trading with CLPS and BrightSpring Health

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

The idea behind CLPS Inc and BrightSpring Health Services, 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.