Correlation Between CLARIVATE PLC and StarTek

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

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

Diversification Opportunities for CLARIVATE PLC and StarTek

0.54

Correlation Coefficient

CLARIVATE PLC  StarTek

Very weak diversification

The 3 months correlation between CLARIVATE and StarTek is 0.54. Overlapping area represents the amount of risk that can be diversified away by holding CLARIVATE PLC and StarTek in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on StarTek 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 StarTek. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of StarTek has no effect on the direction of CLARIVATE PLC i.e., CLARIVATE PLC and StarTek go up and down completely randomly.

Pair Corralation between CLARIVATE PLC and StarTek

Given the investment horizon of 90 days CLARIVATE PLC is expected to generate 0.97 times more return on investment than StarTek. However, CLARIVATE PLC is 1.03 times less risky than StarTek. It trades about -0.03 of its potential returns per unit of risk. StarTek is currently generating about -0.05 per unit of risk. If you would invest  1,061  in CLARIVATE PLC on October 7, 2024 and sell it today you would lose (551.00) from holding CLARIVATE PLC or give up 51.93% of portfolio value over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Weak
Accuracy	26.21%
Values	Daily Returns

CLARIVATE PLC  vs.  StarTek

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.

StarTek

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days StarTek has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of comparatively stable basic indicators, StarTek 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 CLARIVATE PLC and StarTek

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

The idea behind CLARIVATE PLC and StarTek 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 Stock Screener module to find equities using a custom stock filter or screen asymmetry in trading patterns, price, volume, or investment outlook..