Correlation Between CXApp and BASE

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

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

Diversification Opportunities for CXApp and BASE

0.39

Correlation Coefficient

CXApp  BASE

Weak diversification

The 3 months correlation between CXApp and BASE is 0.39. Overlapping area represents the amount of risk that can be diversified away by holding CXApp Inc and BASE Inc in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on BASE Inc and CXApp 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 CXApp Inc are associated (or correlated) with BASE. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of BASE Inc has no effect on the direction of CXApp i.e., CXApp and BASE go up and down completely randomly.

Pair Corralation between CXApp and BASE

Assuming the 90 days horizon CXApp is expected to generate 3.86 times less return on investment than BASE. But when comparing it to its historical volatility, CXApp Inc is 1.22 times less risky than BASE. It trades about 0.07 of its potential returns per unit of risk. BASE Inc is currently generating about 0.23 of returns per unit of risk over similar time horizon. If you would invest  150.00  in BASE Inc on September 28, 2024 and sell it today you would earn a total of  44.00  from holding BASE Inc or generate 29.33% return on investment over 90 days.

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

CXApp Inc  vs.  BASE Inc

CXApp Inc

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days CXApp Inc has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of fairly stable forward indicators, CXApp is not utilizing all of its potentials. The latest stock price fuss, may contribute to near-short-term losses for the sophisticated investors.

BASE Inc

Risk-Adjusted Performance

4 of 100

Insignificant

Compared to the overall equity markets, risk-adjusted returns on investments in BASE Inc are ranked lower than 4 (%) of all global equities and portfolios over the last 90 days. Despite nearly weak basic indicators, BASE reported solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with CXApp and BASE

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

The idea behind CXApp Inc and BASE Inc 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 Price Transformation module to use Price Transformation models to analyze the depth of different equity instruments across global markets.