Correlation Between CSP and Quipt Home

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Can any of the company-specific risk be diversified away by investing in both CSP and Quipt Home 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 Quipt Home into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between CSP Inc and Quipt Home Medical, you can compare the effects of market volatilities on CSP and Quipt Home 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 Quipt Home. Check out your portfolio center. Please also check ongoing floating volatility patterns of CSP and Quipt Home.

Diversification Opportunities for CSP and Quipt Home

-0.04
  Correlation Coefficient

Good diversification

The 3 months correlation between CSP and Quipt is -0.04. Overlapping area represents the amount of risk that can be diversified away by holding CSP Inc and Quipt Home Medical in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Quipt Home Medical 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 Quipt Home. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Quipt Home Medical has no effect on the direction of CSP i.e., CSP and Quipt Home go up and down completely randomly.

Pair Corralation between CSP and Quipt Home

Given the investment horizon of 90 days CSP Inc is expected to under-perform the Quipt Home. But the stock apears to be less risky and, when comparing its historical volatility, CSP Inc is 2.04 times less risky than Quipt Home. The stock trades about -0.16 of its potential returns per unit of risk. The Quipt Home Medical is currently generating about 0.04 of returns per unit of risk over similar time horizon. If you would invest  215.00  in Quipt Home Medical on May 3, 2025 and sell it today you would earn a total of  6.00  from holding Quipt Home Medical or generate 2.79% return on investment over 90 days.
Time Period3 Months [change]
DirectionMoves Against 
StrengthInsignificant
Accuracy100.0%
ValuesDaily Returns

CSP Inc  vs.  Quipt Home Medical

 Performance 
       Timeline  
CSP Inc 

Risk-Adjusted Performance

Very Weak

 
Weak
 
Strong
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.
Quipt Home Medical 

Risk-Adjusted Performance

Insignificant

 
Weak
 
Strong
Compared to the overall equity markets, risk-adjusted returns on investments in Quipt Home Medical are ranked lower than 3 (%) of all global equities and portfolios over the last 90 days. In spite of comparatively unsteady basic indicators, Quipt Home unveiled solid returns over the last few months and may actually be approaching a breakup point.

CSP and Quipt Home Volatility Contrast

   Predicted Return Density   
       Returns  

Pair Trading with CSP and Quipt Home

The main advantage of trading using opposite CSP and Quipt Home positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if CSP position performs unexpectedly, Quipt Home 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 Quipt Home will offset losses from the drop in Quipt Home's long position.
The idea behind CSP Inc and Quipt Home Medical 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 Risk-Return Analysis module to view associations between returns expected from investment and the risk you assume.

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