Correlation Between Clearwater Analytics and DLH Holdings

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

Diversification Opportunities for Clearwater Analytics and DLH Holdings

0.0

Correlation Coefficient

Clearwater Analytics  DLH Holdings

Pay attention - limited upside

The 3 months correlation between Clearwater and DLH is 0.0. Overlapping area represents the amount of risk that can be diversified away by holding Clearwater Analytics Holdings and DLH Holdings Corp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on DLH Holdings Corp 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 DLH Holdings. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of DLH Holdings Corp has no effect on the direction of Clearwater Analytics i.e., Clearwater Analytics and DLH Holdings go up and down completely randomly.

Pair Corralation between Clearwater Analytics and DLH Holdings

Given the investment horizon of 90 days Clearwater Analytics Holdings is expected to generate 1.08 times more return on investment than DLH Holdings. However, Clearwater Analytics is 1.08 times more volatile than DLH Holdings Corp. It trades about 0.11 of its potential returns per unit of risk. DLH Holdings Corp is currently generating about -0.66 per unit of risk. If you would invest  2,846  in Clearwater Analytics Holdings on December 4, 2024 and sell it today you would earn a total of  185.00  from holding Clearwater Analytics Holdings or generate 6.5% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Flat
Strength	Insignificant
Accuracy	100.0%
Values	Daily Returns

Clearwater Analytics Holdings  vs.  DLH Holdings Corp

Clearwater Analytics

Risk-Adjusted Performance

Weak

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

DLH Holdings Corp

Risk-Adjusted Performance

Very Weak

Over the last 90 days DLH Holdings Corp has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of weak performance in the last few months, the Stock's technical indicators remain rather sound which may send shares a bit higher in April 2025. The latest tumult may also be a sign of longer-term up-swing for the firm shareholders.

Pair Trading with Clearwater Analytics and DLH Holdings

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

The idea behind Clearwater Analytics Holdings and DLH Holdings 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 Positions Ratings module to determine portfolio positions ratings based on digital equity recommendations. Macroaxis instant position ratings are based on combination of fundamental analysis and risk-adjusted market performance.