Correlation Between GLT Old and Clearwater Paper

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

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

Diversification Opportunities for GLT Old and Clearwater Paper

0.0

Correlation Coefficient

GLT Old  Clearwater Paper

Pay attention - limited upside

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

Pair Corralation between GLT Old and Clearwater Paper

If you would invest  2,471  in Clearwater Paper on December 19, 2024 and sell it today you would lose (37.00) from holding Clearwater Paper or give up 1.5% of portfolio value over 90 days.

Time Period	3 Months [change]
Direction	Flat
Strength	Insignificant
Accuracy	0.0%
Values	Daily Returns

GLT Old  vs.  Clearwater Paper

GLT Old

Risk-Adjusted Performance

Very Weak

Over the last 90 days GLT Old has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of comparatively stable essential indicators, GLT Old is not utilizing all of its potentials. The latest stock price uproar, may contribute to short-horizon losses for the private investors.

Clearwater Paper

Risk-Adjusted Performance

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in Clearwater Paper are ranked lower than 1 (%) of all global equities and portfolios over the last 90 days. In spite of fairly stable essential indicators, Clearwater Paper is not utilizing all of its potentials. The recent stock price fuss, may contribute to near-short-term losses for the sophisticated investors.

Pair Trading with GLT Old and Clearwater Paper

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

The idea behind GLT Old and Clearwater Paper 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 Investing Opportunities module to build portfolios using our predefined set of ideas and optimize them against your investing preferences.