Correlation Between Richardson Electronics and CSP

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

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

Diversification Opportunities for Richardson Electronics and CSP

0.1

Correlation Coefficient

Richardson Electronics  CSP

Average diversification

The 3 months correlation between Richardson and CSP is 0.1. Overlapping area represents the amount of risk that can be diversified away by holding Richardson Electronics and CSP Inc in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on CSP Inc and Richardson Electronics 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 Richardson Electronics are associated (or correlated) with CSP. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of CSP Inc has no effect on the direction of Richardson Electronics i.e., Richardson Electronics and CSP go up and down completely randomly.

Pair Corralation between Richardson Electronics and CSP

Given the investment horizon of 90 days Richardson Electronics is expected to generate 0.85 times more return on investment than CSP. However, Richardson Electronics is 1.18 times less risky than CSP. It trades about 0.06 of its potential returns per unit of risk. CSP Inc is currently generating about 0.01 per unit of risk. If you would invest  962.00  in Richardson Electronics on August 16, 2025 and sell it today you would earn a total of  86.00  from holding Richardson Electronics or generate 8.94% return on investment over 90 days.

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

Richardson Electronics  vs.  CSP Inc

Richardson Electronics

Risk-Adjusted Performance

Soft

Compared to the overall equity markets, risk-adjusted returns on investments in Richardson Electronics are ranked lower than 4 (%) of all global equities and portfolios over the last 90 days. Despite quite inconsistent essential indicators, Richardson Electronics may actually be approaching a critical reversion point that can send shares even higher in December 2025.

CSP Inc

Risk-Adjusted Performance

Weakest

Over the last 90 days CSP Inc has generated negative risk-adjusted returns adding no value to investors with long positions. Despite fairly strong basic indicators, CSP is not utilizing all of its potentials. The recent stock price confusion, may contribute to short-horizon losses for the traders.

Pair Trading with Richardson Electronics and CSP

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

The idea behind Richardson Electronics and CSP 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 Portfolio Diagnostics module to use generated alerts and portfolio events aggregator to diagnose current holdings.