Correlation Between Clear Secure and Beauty Health

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

By analyzing existing cross correlation between Clear Secure and Beauty Health Co, you can compare the effects of market volatilities on Clear Secure and Beauty Health 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 Clear Secure with a short position of Beauty Health. Check out your portfolio center. Please also check ongoing floating volatility patterns of Clear Secure and Beauty Health.

Diversification Opportunities for Clear Secure and Beauty Health

-0.29

Correlation Coefficient

Clear Secure  Beauty Health

Very good diversification

The 3 months correlation between Clear and Beauty is -0.29. Overlapping area represents the amount of risk that can be diversified away by holding Clear Secure and Beauty Health Co in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Beauty Health and Clear Secure 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 Clear Secure are associated (or correlated) with Beauty Health. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Beauty Health has no effect on the direction of Clear Secure i.e., Clear Secure and Beauty Health go up and down completely randomly.

Pair Corralation between Clear Secure and Beauty Health

Considering the 90-day investment horizon Clear Secure is not expected to generate positive returns. However, Clear Secure is 1.79 times less risky than Beauty Health. It waists most of its returns potential to compensate for thr risk taken. Beauty Health is generating about -0.04 per unit of risk. If you would invest  2,694  in Clear Secure on December 28, 2024 and sell it today you would lose (53.00) from holding Clear Secure or give up 1.97% of portfolio value over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Insignificant
Accuracy	98.36%
Values	Daily Returns

Clear Secure  vs.  Beauty Health Co

Clear Secure

Risk-Adjusted Performance

Weak

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

Beauty Health

Risk-Adjusted Performance

Very Weak

Over the last 90 days Beauty Health Co has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of latest uncertain performance, the Stock's forward indicators remain healthy and the recent disarray on Wall Street may also be a sign of long period gains for the firm investors.

Pair Trading with Clear Secure and Beauty Health

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

The idea behind Clear Secure and Beauty Health Co 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 Theme Ratings module to determine theme ratings based on digital equity recommendations. Macroaxis theme ratings are based on combination of fundamental analysis and risk-adjusted market performance.