Correlation Between CLARIVATE PLC and Indra Sistemas

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

By analyzing existing cross correlation between CLARIVATE PLC and Indra Sistemas SA, you can compare the effects of market volatilities on CLARIVATE PLC and Indra Sistemas 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 Indra Sistemas. Check out your portfolio center. Please also check ongoing floating volatility patterns of CLARIVATE PLC and Indra Sistemas.

Diversification Opportunities for CLARIVATE PLC and Indra Sistemas

0.73

Correlation Coefficient

CLARIVATE PLC  Indra Sistemas

Poor diversification

The 3 months correlation between CLARIVATE and Indra is 0.73. Overlapping area represents the amount of risk that can be diversified away by holding CLARIVATE PLC and Indra Sistemas SA in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Indra Sistemas SA 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 Indra Sistemas. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Indra Sistemas SA has no effect on the direction of CLARIVATE PLC i.e., CLARIVATE PLC and Indra Sistemas go up and down completely randomly.

Pair Corralation between CLARIVATE PLC and Indra Sistemas

Given the investment horizon of 90 days CLARIVATE PLC is expected to under-perform the Indra Sistemas. In addition to that, CLARIVATE PLC is 4.38 times more volatile than Indra Sistemas SA. It trades about -0.08 of its total potential returns per unit of risk. Indra Sistemas SA is currently generating about -0.04 per unit of volatility. If you would invest  929.00  in Indra Sistemas SA on October 14, 2024 and sell it today you would lose (23.00) from holding Indra Sistemas SA or give up 2.48% of portfolio value over 90 days.

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

CLARIVATE PLC  vs.  Indra Sistemas SA

CLARIVATE PLC

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days CLARIVATE PLC has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of fragile performance in the last few months, the Stock's basic indicators remain comparatively stable which may send shares a bit higher in February 2025. The newest uproar may also be a sign of mid-term up-swing for the firm private investors.

Indra Sistemas SA

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Indra Sistemas SA has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of fairly strong basic indicators, Indra Sistemas is not utilizing all of its potentials. The latest stock price disturbance, may contribute to short-term losses for the investors.

Pair Trading with CLARIVATE PLC and Indra Sistemas

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

The idea behind CLARIVATE PLC and Indra Sistemas SA 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 Odds Of Bankruptcy module to get analysis of equity chance of financial distress in the next 2 years.