Correlation Between Clairvest and Spin Master

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

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

Diversification Opportunities for Clairvest and Spin Master

0.31

Correlation Coefficient

Clairvest  Spin Master

Weak diversification

The 3 months correlation between Clairvest and Spin is 0.31. Overlapping area represents the amount of risk that can be diversified away by holding Clairvest Group and Spin Master Corp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Spin Master Corp and Clairvest 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 Clairvest Group are associated (or correlated) with Spin Master. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Spin Master Corp has no effect on the direction of Clairvest i.e., Clairvest and Spin Master go up and down completely randomly.

Pair Corralation between Clairvest and Spin Master

Assuming the 90 days trading horizon Clairvest is expected to generate 1.71 times less return on investment than Spin Master. But when comparing it to its historical volatility, Clairvest Group is 1.53 times less risky than Spin Master. It trades about 0.0 of its potential returns per unit of risk. Spin Master Corp is currently generating about 0.0 of returns per unit of risk over similar time horizon. If you would invest  3,413  in Spin Master Corp on October 11, 2024 and sell it today you would lose (191.00) from holding Spin Master Corp or give up 5.6% of portfolio value over 90 days.

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

Clairvest Group  vs.  Spin Master Corp

Clairvest Group

Risk-Adjusted Performance

1 of 100

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in Clairvest Group are ranked lower than 1 (%) of all global equities and portfolios over the last 90 days. In spite of very healthy technical and fundamental indicators, Clairvest is not utilizing all of its potentials. The recent stock price disarray, may contribute to short-term losses for the investors.

Spin Master Corp

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Spin Master Corp has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of very healthy basic indicators, Spin Master is not utilizing all of its potentials. The current stock price disarray, may contribute to short-term losses for the investors.

Pair Trading with Clairvest and Spin Master

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

The idea behind Clairvest Group and Spin Master Corp 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 Portfolio Suggestion module to get suggestions outside of your existing asset allocation including your own model portfolios.