Correlation Between ClearOne and Kinaxis

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

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

Diversification Opportunities for ClearOne and Kinaxis

-0.19

Correlation Coefficient

ClearOne  Kinaxis

Good diversification

The 3 months correlation between ClearOne and Kinaxis is -0.19. Overlapping area represents the amount of risk that can be diversified away by holding ClearOne and Kinaxis in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Kinaxis and ClearOne 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 ClearOne are associated (or correlated) with Kinaxis. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Kinaxis has no effect on the direction of ClearOne i.e., ClearOne and Kinaxis go up and down completely randomly.

Pair Corralation between ClearOne and Kinaxis

Given the investment horizon of 90 days ClearOne is expected to under-perform the Kinaxis. In addition to that, ClearOne is 4.58 times more volatile than Kinaxis. It trades about -0.01 of its total potential returns per unit of risk. Kinaxis is currently generating about 0.14 per unit of volatility. If you would invest  11,083  in Kinaxis on February 22, 2024 and sell it today you would earn a total of  993.00  from holding Kinaxis or generate 8.96% return on investment over 90 days.

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

ClearOne  vs.  Kinaxis

ClearOne

Risk-Adjusted Performance

7 of 100

OK

Compared to the overall equity markets, risk-adjusted returns on investments in ClearOne are ranked lower than 7 (%) of all global equities and portfolios over the last 90 days. In spite of very weak basic indicators, ClearOne displayed solid returns over the last few months and may actually be approaching a breakup point.

Kinaxis

Risk-Adjusted Performance

5 of 100

Modest

Compared to the overall equity markets, risk-adjusted returns on investments in Kinaxis are ranked lower than 5 (%) of all global equities and portfolios over the last 90 days. Despite nearly conflicting fundamental indicators, Kinaxis may actually be approaching a critical reversion point that can send shares even higher in June 2024.

Pair Trading with ClearOne and Kinaxis

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

The idea behind ClearOne and Kinaxis 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.

Check out your portfolio center.

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 Suggestion module to get suggestions outside of your existing asset allocation including your own model portfolios.