Correlation Between Cloudflare and Value Fund

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

By analyzing existing cross correlation between Cloudflare and Value Fund R6, you can compare the effects of market volatilities on Cloudflare and Value Fund 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 Cloudflare with a short position of Value Fund. Check out your portfolio center. Please also check ongoing floating volatility patterns of Cloudflare and Value Fund.

Diversification Opportunities for Cloudflare and Value Fund

0.83

Correlation Coefficient

Cloudflare  Value Fund

Very poor diversification

The 3 months correlation between Cloudflare and Value is 0.83. Overlapping area represents the amount of risk that can be diversified away by holding Cloudflare and Value Fund R6 in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Value Fund R6 and Cloudflare 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 Cloudflare are associated (or correlated) with Value Fund. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Value Fund R6 has no effect on the direction of Cloudflare i.e., Cloudflare and Value Fund go up and down completely randomly.

Pair Corralation between Cloudflare and Value Fund

Considering the 90-day investment horizon Cloudflare is expected to generate 3.26 times more return on investment than Value Fund. However, Cloudflare is 3.26 times more volatile than Value Fund R6. It trades about 0.27 of its potential returns per unit of risk. Value Fund R6 is currently generating about 0.1 per unit of risk. If you would invest  14,236  in Cloudflare on May 11, 2025 and sell it today you would earn a total of  6,224  from holding Cloudflare or generate 43.72% return on investment over 90 days.

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

Cloudflare  vs.  Value Fund R6

Cloudflare

Risk-Adjusted Performance

Solid

Compared to the overall equity markets, risk-adjusted returns on investments in Cloudflare are ranked lower than 21 (%) of all global equities and portfolios over the last 90 days. In spite of comparatively unsteady technical and fundamental indicators, Cloudflare unveiled solid returns over the last few months and may actually be approaching a breakup point.

Value Fund R6

Risk-Adjusted Performance

Fair

Compared to the overall equity markets, risk-adjusted returns on investments in Value Fund R6 are ranked lower than 7 (%) of all funds and portfolios of funds over the last 90 days. In spite of fairly strong fundamental indicators, Value Fund is not utilizing all of its potentials. The current stock price disturbance, may contribute to short-term losses for the investors.

Pair Trading with Cloudflare and Value Fund

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

The idea behind Cloudflare and Value Fund R6 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 Financial Widgets module to easily integrated Macroaxis content with over 30 different plug-and-play financial widgets.