Correlation Between Country Club and Clean Science

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

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

Diversification Opportunities for Country Club and Clean Science

0.84

Correlation Coefficient

Country Club  Clean Science

Very poor diversification

The 3 months correlation between Country and Clean is 0.84. Overlapping area represents the amount of risk that can be diversified away by holding Country Club Hospitality and Clean Science and in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Clean Science and Country Club 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 Country Club Hospitality are associated (or correlated) with Clean Science. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Clean Science has no effect on the direction of Country Club i.e., Country Club and Clean Science go up and down completely randomly.

Pair Corralation between Country Club and Clean Science

Assuming the 90 days trading horizon Country Club Hospitality is expected to generate 1.49 times more return on investment than Clean Science. However, Country Club is 1.49 times more volatile than Clean Science and. It trades about -0.04 of its potential returns per unit of risk. Clean Science and is currently generating about -0.09 per unit of risk. If you would invest  1,928  in Country Club Hospitality on December 24, 2024 and sell it today you would lose (239.00) from holding Country Club Hospitality or give up 12.4% of portfolio value over 90 days.

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

Country Club Hospitality  vs.  Clean Science and

Country Club Hospitality

Risk-Adjusted Performance

Very Weak

Over the last 90 days Country Club Hospitality has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of latest conflicting performance, the Stock's technical indicators remain healthy and the recent disarray on Wall Street may also be a sign of long period gains for the firm investors.

Clean Science

Risk-Adjusted Performance

Very Weak

Over the last 90 days Clean Science and has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of abnormal performance in the last few months, the Stock's technical and fundamental indicators remain very healthy which may send shares a bit higher in April 2025. The recent disarray may also be a sign of long period up-swing for the firm investors.

Pair Trading with Country Club and Clean Science

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

The idea behind Country Club Hospitality and Clean Science and 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 Equity Search module to search for actively traded equities including funds and ETFs from over 30 global markets.