Correlation Between Pulse Seismic and Cashmere Valley

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

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

Diversification Opportunities for Pulse Seismic and Cashmere Valley

0.7

Correlation Coefficient

Pulse Seismic  Cashmere Valley

Poor diversification

The 3 months correlation between Pulse and Cashmere is 0.7. Overlapping area represents the amount of risk that can be diversified away by holding Pulse Seismic and Cashmere Valley Bank in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Cashmere Valley Bank and Pulse Seismic 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 Pulse Seismic are associated (or correlated) with Cashmere Valley. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Cashmere Valley Bank has no effect on the direction of Pulse Seismic i.e., Pulse Seismic and Cashmere Valley go up and down completely randomly.

Pair Corralation between Pulse Seismic and Cashmere Valley

Assuming the 90 days horizon Pulse Seismic is expected to generate 5.07 times more return on investment than Cashmere Valley. However, Pulse Seismic is 5.07 times more volatile than Cashmere Valley Bank. It trades about 0.14 of its potential returns per unit of risk. Cashmere Valley Bank is currently generating about 0.04 per unit of risk. If you would invest  215.00  in Pulse Seismic on June 28, 2025 and sell it today you would earn a total of  48.00  from holding Pulse Seismic or generate 22.33% return on investment over 90 days.

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

Pulse Seismic  vs.  Cashmere Valley Bank

Pulse Seismic

Risk-Adjusted Performance

Good

Compared to the overall equity markets, risk-adjusted returns on investments in Pulse Seismic are ranked lower than 11 (%) of all global equities and portfolios over the last 90 days. Despite nearly unsteady fundamental indicators, Pulse Seismic reported solid returns over the last few months and may actually be approaching a breakup point.

Cashmere Valley Bank

Risk-Adjusted Performance

Soft

Compared to the overall equity markets, risk-adjusted returns on investments in Cashmere Valley Bank are ranked lower than 3 (%) of all global equities and portfolios over the last 90 days. In spite of fairly strong technical indicators, Cashmere Valley is not utilizing all of its potentials. The current stock price disturbance, may contribute to short-term losses for the investors.

Pair Trading with Pulse Seismic and Cashmere Valley

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

The idea behind Pulse Seismic and Cashmere Valley Bank 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 ETF Categories module to list of ETF categories grouped based on various criteria, such as the investment strategy or type of investments.