Correlation Between Kingsoft Cloud and CommVault Systems

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

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

Diversification Opportunities for Kingsoft Cloud and CommVault Systems

0.58

Correlation Coefficient

Kingsoft Cloud  CommVault Systems

Very weak diversification

The 3 months correlation between Kingsoft and CommVault is 0.58. Overlapping area represents the amount of risk that can be diversified away by holding Kingsoft Cloud Holdings and CommVault Systems in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on CommVault Systems and Kingsoft 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 Kingsoft Cloud Holdings are associated (or correlated) with CommVault Systems. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of CommVault Systems has no effect on the direction of Kingsoft Cloud i.e., Kingsoft Cloud and CommVault Systems go up and down completely randomly.

Pair Corralation between Kingsoft Cloud and CommVault Systems

Allowing for the 90-day total investment horizon Kingsoft Cloud Holdings is expected to under-perform the CommVault Systems. In addition to that, Kingsoft Cloud is 1.94 times more volatile than CommVault Systems. It trades about -0.04 of its total potential returns per unit of risk. CommVault Systems is currently generating about -0.01 per unit of volatility. If you would invest  17,931  in CommVault Systems on February 9, 2025 and sell it today you would lose (871.00) from holding CommVault Systems or give up 4.86% of portfolio value over 90 days.

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

Kingsoft Cloud Holdings  vs.  CommVault Systems

Kingsoft Cloud Holdings

Risk-Adjusted Performance

Very Weak

Over the last 90 days Kingsoft Cloud Holdings has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of uncertain performance in the last few months, the Stock's fundamental indicators remain rather sound which may send shares a bit higher in June 2025. The latest tumult may also be a sign of longer-term up-swing for the firm shareholders.

CommVault Systems

Risk-Adjusted Performance

Very Weak

Over the last 90 days CommVault Systems has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of comparatively stable essential indicators, CommVault Systems is not utilizing all of its potentials. The latest stock price uproar, may contribute to short-horizon losses for the private investors.

Pair Trading with Kingsoft Cloud and CommVault Systems

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

The idea behind Kingsoft Cloud Holdings and CommVault Systems 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 Investing Opportunities module to build portfolios using our predefined set of ideas and optimize them against your investing preferences.