Correlation Between Clough Global and Clough Global

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

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

Diversification Opportunities for Clough Global and Clough Global

0.61

Correlation Coefficient

Clough Global  Clough Global

Poor diversification

The 3 months correlation between Clough and Clough is 0.61. Overlapping area represents the amount of risk that can be diversified away by holding Clough Global Allocation and Clough Global Opportunities in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Clough Global Opport and Clough Global 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 Clough Global Allocation are associated (or correlated) with Clough Global. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Clough Global Opport has no effect on the direction of Clough Global i.e., Clough Global and Clough Global go up and down completely randomly.

Pair Corralation between Clough Global and Clough Global

Considering the 90-day investment horizon Clough Global Allocation is expected to under-perform the Clough Global. But the fund apears to be less risky and, when comparing its historical volatility, Clough Global Allocation is 1.24 times less risky than Clough Global. The fund trades about -0.03 of its potential returns per unit of risk. The Clough Global Opportunities is currently generating about -0.02 of returns per unit of risk over similar time horizon. If you would invest  518.00  in Clough Global Opportunities on November 30, 2024 and sell it today you would lose (6.00) from holding Clough Global Opportunities or give up 1.16% of portfolio value over 90 days.

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

Clough Global Allocation  vs.  Clough Global Opportunities

Clough Global Allocation

Risk-Adjusted Performance

Very Weak

Over the last 90 days Clough Global Allocation has generated negative risk-adjusted returns adding no value to fund investors. In spite of fairly stable essential indicators, Clough Global is not utilizing all of its potentials. The recent stock price fuss, may contribute to near-short-term losses for the sophisticated investors.

Clough Global Opport

Risk-Adjusted Performance

Very Weak

Over the last 90 days Clough Global Opportunities has generated negative risk-adjusted returns adding no value to fund investors. In spite of very healthy essential indicators, Clough Global is not utilizing all of its potentials. The latest stock price disarray, may contribute to short-term losses for the investors.

Pair Trading with Clough Global and Clough Global

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

The idea behind Clough Global Allocation and Clough Global Opportunities 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 Equity Valuation module to check real value of public entities based on technical and fundamental data.