Correlation Between CARGOJET INC and Clarkson PLC

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

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

Diversification Opportunities for CARGOJET INC and Clarkson PLC

0.51

Correlation Coefficient

CARGOJET INC  Clarkson PLC

Very weak diversification

The 3 months correlation between CARGOJET and Clarkson is 0.51. Overlapping area represents the amount of risk that can be diversified away by holding CARGOJET INC VAR and Clarkson PLC in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Clarkson PLC and CARGOJET INC 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 CARGOJET INC VAR are associated (or correlated) with Clarkson PLC. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Clarkson PLC has no effect on the direction of CARGOJET INC i.e., CARGOJET INC and Clarkson PLC go up and down completely randomly.

Pair Corralation between CARGOJET INC and Clarkson PLC

Assuming the 90 days trading horizon CARGOJET INC VAR is expected to under-perform the Clarkson PLC. But the stock apears to be less risky and, when comparing its historical volatility, CARGOJET INC VAR is 1.28 times less risky than Clarkson PLC. The stock trades about -0.19 of its potential returns per unit of risk. The Clarkson PLC is currently generating about -0.04 of returns per unit of risk over similar time horizon. If you would invest  4,780  in Clarkson PLC on December 31, 2024 and sell it today you would lose (540.00) from holding Clarkson PLC or give up 11.3% of portfolio value over 90 days.

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

CARGOJET INC VAR  vs.  Clarkson PLC

CARGOJET INC VAR

Risk-Adjusted Performance

Very Weak

Over the last 90 days CARGOJET INC VAR has generated negative risk-adjusted returns adding no value to investors with long positions. Despite uncertain performance in the last few months, the Stock's basic indicators remain nearly stable which may send shares a bit higher in May 2025. The current disturbance may also be a sign of long-run up-swing for the company stockholders.

Clarkson PLC

Risk-Adjusted Performance

Very Weak

Over the last 90 days Clarkson PLC has generated negative risk-adjusted returns adding no value to investors with long positions. Despite latest fragile performance, the Stock's basic indicators remain stable and the current disturbance on Wall Street may also be a sign of long-run gains for the company stockholders.

Pair Trading with CARGOJET INC and Clarkson PLC

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

The idea behind CARGOJET INC VAR and Clarkson PLC 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 Efficient Frontier module to plot and analyze your portfolio and positions against risk-return landscape of the market..