Correlation Between CLARIVATE PLC and GDS Holdings
Can any of the company-specific risk be diversified away by investing in both CLARIVATE PLC and GDS 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 CLARIVATE PLC and GDS Holdings into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between CLARIVATE PLC and GDS Holdings, you can compare the effects of market volatilities on CLARIVATE PLC and GDS 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 CLARIVATE PLC with a short position of GDS Holdings. Check out your portfolio center. Please also check ongoing floating volatility patterns of CLARIVATE PLC and GDS Holdings.
Diversification Opportunities for CLARIVATE PLC and GDS Holdings
-0.59 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between CLARIVATE and GDS is -0.59. Overlapping area represents the amount of risk that can be diversified away by holding CLARIVATE PLC and GDS Holdings in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on GDS Holdings 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 GDS Holdings. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of GDS Holdings has no effect on the direction of CLARIVATE PLC i.e., CLARIVATE PLC and GDS Holdings go up and down completely randomly.
Pair Corralation between CLARIVATE PLC and GDS Holdings
Given the investment horizon of 90 days CLARIVATE PLC is expected to under-perform the GDS Holdings. But the stock apears to be less risky and, when comparing its historical volatility, CLARIVATE PLC is 3.3 times less risky than GDS Holdings. The stock trades about -0.15 of its potential returns per unit of risk. The GDS Holdings is currently generating about 0.06 of returns per unit of risk over similar time horizon. If you would invest 2,352 in GDS Holdings on December 28, 2024 and sell it today you would earn a total of 265.00 from holding GDS Holdings or generate 11.27% return on investment over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Against |
Strength | Very Weak |
Accuracy | 100.0% |
Values | Daily Returns |
CLARIVATE PLC vs. GDS Holdings
Performance |
Timeline |
CLARIVATE PLC |
GDS Holdings |
CLARIVATE PLC and GDS Holdings Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with CLARIVATE PLC and GDS Holdings
The main advantage of trading using opposite CLARIVATE PLC and GDS Holdings positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if CLARIVATE PLC position performs unexpectedly, GDS 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 GDS Holdings will offset losses from the drop in GDS Holdings' long position.CLARIVATE PLC vs. Genpact Limited | CLARIVATE PLC vs. ExlService Holdings | CLARIVATE PLC vs. Science Applications International | CLARIVATE PLC vs. WNS Holdings |
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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 Portfolio Optimization module to compute new portfolio that will generate highest expected return given your specified tolerance for risk.
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