Correlation Between CSP and Lianhe Sowell

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

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

Diversification Opportunities for CSP and Lianhe Sowell

0.12

Correlation Coefficient

CSP  Lianhe Sowell

Average diversification

The 3 months correlation between CSP and Lianhe is 0.12. Overlapping area represents the amount of risk that can be diversified away by holding CSP Inc and Lianhe Sowell International in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Lianhe Sowell Intern 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 Lianhe Sowell. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Lianhe Sowell Intern has no effect on the direction of CSP i.e., CSP and Lianhe Sowell go up and down completely randomly.

Pair Corralation between CSP and Lianhe Sowell

Given the investment horizon of 90 days CSP Inc is expected to generate 0.7 times more return on investment than Lianhe Sowell. However, CSP Inc is 1.44 times less risky than Lianhe Sowell. It trades about 0.02 of its potential returns per unit of risk. Lianhe Sowell International is currently generating about -0.04 per unit of risk. If you would invest  1,113  in CSP Inc on August 12, 2025 and sell it today you would earn a total of  12.00  from holding CSP Inc or generate 1.08% return on investment over 90 days.

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

CSP Inc  vs.  Lianhe Sowell International

CSP Inc

Risk-Adjusted Performance

Soft

Compared to the overall equity markets, risk-adjusted returns on investments in CSP Inc are ranked lower than 1 (%) of all global equities and portfolios over the last 90 days. Despite fairly strong basic indicators, CSP is not utilizing all of its potentials. The recent stock price confusion, may contribute to short-horizon losses for the traders.

Lianhe Sowell Intern

Risk-Adjusted Performance

Weakest

Over the last 90 days Lianhe Sowell International has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of inconsistent performance in the last few months, the Stock's basic indicators remain fairly stable which may send shares a bit higher in December 2025. The latest fuss may also be a sign of long-term up-swing for the venture sophisticated investors.

Pair Trading with CSP and Lianhe Sowell

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

The idea behind CSP Inc and Lianhe Sowell International 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 Portfolio Backtesting module to avoid under-diversification and over-optimization by backtesting your portfolios.