Correlation Between Exela Technologies and Clearwater Analytics

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

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

Diversification Opportunities for Exela Technologies and Clearwater Analytics

-0.24

Correlation Coefficient

Exela Technologies  Clearwater Analytics

Very good diversification

The 3 months correlation between Exela and Clearwater is -0.24. Overlapping area represents the amount of risk that can be diversified away by holding Exela Technologies Preferred and Clearwater Analytics Holdings in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Clearwater Analytics and Exela Technologies 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 Exela Technologies Preferred are associated (or correlated) with Clearwater Analytics. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Clearwater Analytics has no effect on the direction of Exela Technologies i.e., Exela Technologies and Clearwater Analytics go up and down completely randomly.

Pair Corralation between Exela Technologies and Clearwater Analytics

If you would invest  72.00  in Exela Technologies Preferred on September 21, 2024 and sell it today you would earn a total of  0.00  from holding Exela Technologies Preferred or generate 0.0% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Insignificant
Accuracy	4.76%
Values	Daily Returns

Exela Technologies Preferred  vs.  Clearwater Analytics Holdings

Exela Technologies

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Exela Technologies Preferred has generated negative risk-adjusted returns adding no value to investors with long positions. Even with weak performance in the last few months, the Preferred Stock's basic indicators remain relatively invariable which may send shares a bit higher in January 2025. The latest agitation may also be a sign of long-running up-swing for the enterprise retail investors.

Clearwater Analytics

Risk-Adjusted Performance

4 of 100

Modest

Compared to the overall equity markets, risk-adjusted returns on investments in Clearwater Analytics Holdings are ranked lower than 4 (%) of all global equities and portfolios over the last 90 days. In spite of very abnormal basic indicators, Clearwater Analytics may actually be approaching a critical reversion point that can send shares even higher in January 2025.

Pair Trading with Exela Technologies and Clearwater Analytics

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

The idea behind Exela Technologies Preferred and Clearwater Analytics Holdings 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 Options Analysis module to analyze and evaluate options and option chains as a potential hedge for your portfolios.