Correlation Between Clearwater Analytics and Blackbaud

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

By analyzing existing cross correlation between Clearwater Analytics Holdings and Blackbaud, you can compare the effects of market volatilities on Clearwater Analytics and Blackbaud 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 Clearwater Analytics with a short position of Blackbaud. Check out your portfolio center. Please also check ongoing floating volatility patterns of Clearwater Analytics and Blackbaud.

Diversification Opportunities for Clearwater Analytics and Blackbaud

0.29

Correlation Coefficient

Clearwater Analytics  Blackbaud

Modest diversification

The 3 months correlation between Clearwater and Blackbaud is 0.29. Overlapping area represents the amount of risk that can be diversified away by holding Clearwater Analytics Holdings and Blackbaud in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Blackbaud and Clearwater Analytics 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 Clearwater Analytics Holdings are associated (or correlated) with Blackbaud. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Blackbaud has no effect on the direction of Clearwater Analytics i.e., Clearwater Analytics and Blackbaud go up and down completely randomly.

Pair Corralation between Clearwater Analytics and Blackbaud

Given the investment horizon of 90 days Clearwater Analytics Holdings is expected to generate 0.96 times more return on investment than Blackbaud. However, Clearwater Analytics Holdings is 1.04 times less risky than Blackbaud. It trades about 0.22 of its potential returns per unit of risk. Blackbaud is currently generating about -0.02 per unit of risk. If you would invest  2,685  in Clearwater Analytics Holdings on August 30, 2024 and sell it today you would earn a total of  536.00  from holding Clearwater Analytics Holdings or generate 19.96% return on investment over 90 days.

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

Clearwater Analytics Holdings  vs.  Blackbaud

Clearwater Analytics

Risk-Adjusted Performance

13 of 100

Good

Compared to the overall equity markets, risk-adjusted returns on investments in Clearwater Analytics Holdings are ranked lower than 13 (%) of all global equities and portfolios over the last 90 days. In spite of very inconsistent basic indicators, Clearwater Analytics displayed solid returns over the last few months and may actually be approaching a breakup point.

Blackbaud

Risk-Adjusted Performance

1 of 100

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in Blackbaud are ranked lower than 1 (%) of all global equities and portfolios over the last 90 days. Despite somewhat strong forward-looking signals, Blackbaud is not utilizing all of its potentials. The latest stock price disturbance, may contribute to short-term losses for the investors.

Pair Trading with Clearwater Analytics and Blackbaud

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

The idea behind Clearwater Analytics Holdings and Blackbaud 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 Sign In To Macroaxis module to sign in to explore Macroaxis' wealth optimization platform and fintech modules.