Correlation Between Clearwater Analytics and CleanSpark

Can any of the company-specific risk be diversified away by investing in both Clearwater Analytics and CleanSpark 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 CleanSpark 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 CleanSpark, you can compare the effects of market volatilities on Clearwater Analytics and CleanSpark 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 CleanSpark. Check out your portfolio center. Please also check ongoing floating volatility patterns of Clearwater Analytics and CleanSpark.

Diversification Opportunities for Clearwater Analytics and CleanSpark

0.8

Correlation Coefficient

Clearwater Analytics  CleanSpark

Very poor diversification

The 3 months correlation between Clearwater and CleanSpark is 0.8. Overlapping area represents the amount of risk that can be diversified away by holding Clearwater Analytics Holdings and CleanSpark in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on CleanSpark 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 CleanSpark. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of CleanSpark has no effect on the direction of Clearwater Analytics i.e., Clearwater Analytics and CleanSpark go up and down completely randomly.

Pair Corralation between Clearwater Analytics and CleanSpark

Given the investment horizon of 90 days Clearwater Analytics is expected to generate 1.36 times less return on investment than CleanSpark. But when comparing it to its historical volatility, Clearwater Analytics Holdings is 2.94 times less risky than CleanSpark. It trades about 0.08 of its potential returns per unit of risk. CleanSpark is currently generating about 0.04 of returns per unit of risk over similar time horizon. If you would invest  902.00  in CleanSpark on October 3, 2024 and sell it today you would earn a total of  19.00  from holding CleanSpark or generate 2.11% return on investment over 90 days.

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

Clearwater Analytics Holdings  vs.  CleanSpark

Clearwater Analytics

Risk-Adjusted Performance

5 of 100

Modest

Compared to the overall equity markets, risk-adjusted returns on investments in Clearwater Analytics Holdings are ranked lower than 5 (%) of all global equities and portfolios over the last 90 days. In spite of very unfluctuating basic indicators, Clearwater Analytics may actually be approaching a critical reversion point that can send shares even higher in February 2025.

CleanSpark

Risk-Adjusted Performance

3 of 100

Insignificant

Compared to the overall equity markets, risk-adjusted returns on investments in CleanSpark are ranked lower than 3 (%) of all global equities and portfolios over the last 90 days. Despite quite uncertain basic indicators, CleanSpark disclosed solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Clearwater Analytics and CleanSpark

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

The idea behind Clearwater Analytics Holdings and CleanSpark 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.

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 Investing Opportunities module to build portfolios using our predefined set of ideas and optimize them against your investing preferences.