Correlation Between CLARIVATE PLC and Barrett Business

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

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

Diversification Opportunities for CLARIVATE PLC and Barrett Business

-0.81

Correlation Coefficient

CLARIVATE PLC  Barrett Business

Pay attention - limited upside

The 3 months correlation between CLARIVATE and Barrett is -0.81. Overlapping area represents the amount of risk that can be diversified away by holding CLARIVATE PLC and Barrett Business Services in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Barrett Business Services and CLARIVATE PLC 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 CLARIVATE PLC are associated (or correlated) with Barrett Business. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Barrett Business Services has no effect on the direction of CLARIVATE PLC i.e., CLARIVATE PLC and Barrett Business go up and down completely randomly.

Pair Corralation between CLARIVATE PLC and Barrett Business

Given the investment horizon of 90 days CLARIVATE PLC is expected to under-perform the Barrett Business. In addition to that, CLARIVATE PLC is 1.88 times more volatile than Barrett Business Services. It trades about -0.21 of its total potential returns per unit of risk. Barrett Business Services is currently generating about -0.1 per unit of volatility. If you would invest  12,666  in Barrett Business Services on January 31, 2024 and sell it today you would lose (313.00) from holding Barrett Business Services or give up 2.47% of portfolio value over 90 days.

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

CLARIVATE PLC  vs.  Barrett Business Services

CLARIVATE PLC

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days CLARIVATE PLC has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of fragile performance in the last few months, the Stock's basic indicators remain comparatively stable which may send shares a bit higher in May 2024. The newest uproar may also be a sign of mid-term up-swing for the firm private investors.

Barrett Business Services

Risk-Adjusted Performance

8 of 100

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Barrett Business Services are ranked lower than 8 (%) of all global equities and portfolios over the last 90 days. Despite fairly uncertain basic indicators, Barrett Business may actually be approaching a critical reversion point that can send shares even higher in May 2024.

Pair Trading with CLARIVATE PLC and Barrett Business

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

The idea behind CLARIVATE PLC and Barrett Business Services 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 ETFs module to find actively traded Exchange Traded Funds (ETF) from around the world.