Correlation Between Clarus Corp and OneSpaWorld Holdings

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

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

Diversification Opportunities for Clarus Corp and OneSpaWorld Holdings

0.87

Correlation Coefficient

Clarus Corp  OneSpaWorld Holdings

Very poor diversification

The 3 months correlation between Clarus and OneSpaWorld is 0.87. Overlapping area represents the amount of risk that can be diversified away by holding Clarus Corp and OneSpaWorld Holdings in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on OneSpaWorld Holdings and Clarus Corp 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 Clarus Corp are associated (or correlated) with OneSpaWorld Holdings. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of OneSpaWorld Holdings has no effect on the direction of Clarus Corp i.e., Clarus Corp and OneSpaWorld Holdings go up and down completely randomly.

Pair Corralation between Clarus Corp and OneSpaWorld Holdings

Given the investment horizon of 90 days Clarus Corp is expected to generate 0.91 times more return on investment than OneSpaWorld Holdings. However, Clarus Corp is 1.09 times less risky than OneSpaWorld Holdings. It trades about -0.09 of its potential returns per unit of risk. OneSpaWorld Holdings is currently generating about -0.1 per unit of risk. If you would invest  444.00  in Clarus Corp on December 30, 2024 and sell it today you would lose (61.00) from holding Clarus Corp or give up 13.74% of portfolio value over 90 days.

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

Clarus Corp  vs.  OneSpaWorld Holdings

Clarus Corp

Risk-Adjusted Performance

Very Weak

Over the last 90 days Clarus Corp has generated negative risk-adjusted returns adding no value to investors with long positions. Even with weak performance in the last few months, the Stock's basic indicators remain relatively invariable which may send shares a bit higher in April 2025. The latest agitation may also be a sign of long-running up-swing for the enterprise retail investors.

OneSpaWorld Holdings

Risk-Adjusted Performance

Very Weak

Over the last 90 days OneSpaWorld Holdings has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of weak performance in the last few months, the Stock's basic indicators remain fairly stable which may send shares a bit higher in April 2025. The latest fuss may also be a sign of long-term up-swing for the venture sophisticated investors.

Pair Trading with Clarus Corp and OneSpaWorld Holdings

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

The idea behind Clarus Corp and OneSpaWorld Holdings 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 Technical Analysis module to check basic technical indicators and analysis based on most latest market data.