Correlation Between Clarus Corp and SeaWorld Entertainment

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

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

Diversification Opportunities for Clarus Corp and SeaWorld Entertainment

0.0

Correlation Coefficient

Clarus Corp  SeaWorld Entertainment

Pay attention - limited upside

The 3 months correlation between Clarus and SeaWorld is 0.0. Overlapping area represents the amount of risk that can be diversified away by holding Clarus Corp and SeaWorld Entertainment in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on SeaWorld Entertainment 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 SeaWorld Entertainment. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of SeaWorld Entertainment has no effect on the direction of Clarus Corp i.e., Clarus Corp and SeaWorld Entertainment go up and down completely randomly.

Pair Corralation between Clarus Corp and SeaWorld Entertainment

If you would invest (100.00) in SeaWorld Entertainment on December 19, 2024 and sell it today you would earn a total of  100.00  from holding SeaWorld Entertainment or generate -100.0% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Flat
Strength	Insignificant
Accuracy	0.0%
Values	Daily Returns

Clarus Corp  vs.  SeaWorld Entertainment

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 relatively invariable basic indicators, Clarus Corp is not utilizing all of its potentials. The current stock price agitation, may contribute to short-term losses for the retail investors.

SeaWorld Entertainment

Risk-Adjusted Performance

Very Weak

Over the last 90 days SeaWorld Entertainment has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of comparatively stable basic indicators, SeaWorld Entertainment is not utilizing all of its potentials. The current stock price uproar, may contribute to short-horizon losses for the private investors.

Pair Trading with Clarus Corp and SeaWorld Entertainment

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

The idea behind Clarus Corp and SeaWorld Entertainment 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 Bond Analysis module to evaluate and analyze corporate bonds as a potential investment for your portfolios..