Correlation Between CSP and IBEX

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

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

Diversification Opportunities for CSP and IBEX

-0.26

Correlation Coefficient

CSP  IBEX

Very good diversification

The 3 months correlation between CSP and IBEX is -0.26. Overlapping area represents the amount of risk that can be diversified away by holding CSP Inc and IBEX in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on IBEX and CSP 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 CSP Inc are associated (or correlated) with IBEX. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of IBEX has no effect on the direction of CSP i.e., CSP and IBEX go up and down completely randomly.

Pair Corralation between CSP and IBEX

Given the investment horizon of 90 days CSP Inc is expected to under-perform the IBEX. In addition to that, CSP is 2.2 times more volatile than IBEX. It trades about -0.15 of its total potential returns per unit of risk. IBEX is currently generating about 0.03 per unit of volatility. If you would invest  2,803  in IBEX on May 14, 2025 and sell it today you would earn a total of  76.50  from holding IBEX or generate 2.73% return on investment over 90 days.

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

CSP Inc  vs.  IBEX

CSP Inc

Risk-Adjusted Performance

Weakest

Over the last 90 days CSP Inc has generated negative risk-adjusted returns adding no value to investors with long positions. Despite weak performance in the last few months, the Stock's basic indicators remain fairly strong which may send shares a bit higher in September 2025. The recent confusion may also be a sign of long-lasting up-swing for the firm traders.

IBEX

Risk-Adjusted Performance

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in IBEX are ranked lower than 2 (%) of all global equities and portfolios over the last 90 days. In spite of fairly strong technical and fundamental indicators, IBEX is not utilizing all of its potentials. The current stock price disturbance, may contribute to short-term losses for the investors.

Pair Trading with CSP and IBEX

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

The idea behind CSP Inc and IBEX 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 Odds Of Bankruptcy module to get analysis of equity chance of financial distress in the next 2 years.