Correlation Between Crowdstrike Holdings and Country Garden

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

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

Diversification Opportunities for Crowdstrike Holdings and Country Garden

-0.18

Correlation Coefficient

Crowdstrike Holdings  Country Garden

Good diversification

The 3 months correlation between Crowdstrike and Country is -0.18. Overlapping area represents the amount of risk that can be diversified away by holding Crowdstrike Holdings and Country Garden Holdings in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Country Garden Holdings and Crowdstrike Holdings 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 Crowdstrike Holdings are associated (or correlated) with Country Garden. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Country Garden Holdings has no effect on the direction of Crowdstrike Holdings i.e., Crowdstrike Holdings and Country Garden go up and down completely randomly.

Pair Corralation between Crowdstrike Holdings and Country Garden

Given the investment horizon of 90 days Crowdstrike Holdings is expected to under-perform the Country Garden. But the stock apears to be less risky and, when comparing its historical volatility, Crowdstrike Holdings is 15.93 times less risky than Country Garden. The stock trades about -0.31 of its potential returns per unit of risk. The Country Garden Holdings is currently generating about 0.16 of returns per unit of risk over similar time horizon. If you would invest  7.00  in Country Garden Holdings on January 24, 2024 and sell it today you would earn a total of  3.00  from holding Country Garden Holdings or generate 42.86% return on investment over 90 days.

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

Crowdstrike Holdings  vs.  Country Garden Holdings

Crowdstrike Holdings

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Crowdstrike Holdings has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of rather sound basic indicators, Crowdstrike Holdings is not utilizing all of its potentials. The latest stock price tumult, may contribute to shorter-term losses for the shareholders.

Country Garden Holdings

Risk-Adjusted Performance

5 of 100

Modest

Compared to the overall equity markets, risk-adjusted returns on investments in Country Garden Holdings are ranked lower than 5 (%) of all global equities and portfolios over the last 90 days. Despite nearly weak basic indicators, Country Garden reported solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Crowdstrike Holdings and Country Garden

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

The idea behind Crowdstrike Holdings and Country Garden Holdings 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.