Correlation Between Consensus Cloud and Squarespace

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

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

Diversification Opportunities for Consensus Cloud and Squarespace

-0.56

Correlation Coefficient

Consensus Cloud  Squarespace

Excellent diversification

The 3 months correlation between Consensus and Squarespace is -0.56. Overlapping area represents the amount of risk that can be diversified away by holding Consensus Cloud Solutions and Squarespace in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Squarespace and Consensus Cloud 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 Consensus Cloud Solutions are associated (or correlated) with Squarespace. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Squarespace has no effect on the direction of Consensus Cloud i.e., Consensus Cloud and Squarespace go up and down completely randomly.

Pair Corralation between Consensus Cloud and Squarespace

Given the investment horizon of 90 days Consensus Cloud Solutions is expected to under-perform the Squarespace. In addition to that, Consensus Cloud is 2.27 times more volatile than Squarespace. It trades about -0.09 of its total potential returns per unit of risk. Squarespace is currently generating about 0.07 per unit of volatility. If you would invest  3,268  in Squarespace on February 2, 2024 and sell it today you would earn a total of  168.00  from holding Squarespace or generate 5.14% return on investment over 90 days.

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

Consensus Cloud Solutions  vs.  Squarespace

Consensus Cloud Solutions

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Consensus Cloud Solutions has generated negative risk-adjusted returns adding no value to investors with long positions. Despite unsteady performance in the last few months, the Stock's basic indicators remain fairly strong which may send shares a bit higher in June 2024. The recent confusion may also be a sign of long-lasting up-swing for the firm traders.

Squarespace

Risk-Adjusted Performance

6 of 100

Modest

Compared to the overall equity markets, risk-adjusted returns on investments in Squarespace are ranked lower than 6 (%) of all global equities and portfolios over the last 90 days. Even with relatively weak basic indicators, Squarespace may actually be approaching a critical reversion point that can send shares even higher in June 2024.

Pair Trading with Consensus Cloud and Squarespace

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

The idea behind Consensus Cloud Solutions and Squarespace 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 Latest Portfolios module to quick portfolio dashboard that showcases your latest portfolios.