Correlation Between Clear Secure and Toast

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

By analyzing existing cross correlation between Clear Secure and Toast Inc, you can compare the effects of market volatilities on Clear Secure and Toast 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 Toast. Check out your portfolio center. Please also check ongoing floating volatility patterns of Clear Secure and Toast.

Diversification Opportunities for Clear Secure and Toast

-0.71

Correlation Coefficient

Clear Secure  Toast

Pay attention - limited upside

The 3 months correlation between Clear and Toast is -0.71. Overlapping area represents the amount of risk that can be diversified away by holding Clear Secure and Toast Inc in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Toast Inc 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 Toast. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Toast Inc has no effect on the direction of Clear Secure i.e., Clear Secure and Toast go up and down completely randomly.

Pair Corralation between Clear Secure and Toast

Considering the 90-day investment horizon Clear Secure is expected to generate 0.79 times more return on investment than Toast. However, Clear Secure is 1.26 times less risky than Toast. It trades about 0.04 of its potential returns per unit of risk. Toast Inc is currently generating about 0.02 per unit of risk. If you would invest  2,740  in Clear Secure on September 13, 2024 and sell it today you would earn a total of  39.00  from holding Clear Secure or generate 1.42% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Weak
Accuracy	95.45%
Values	Daily Returns

Clear Secure  vs.  Toast Inc

Clear Secure

Risk-Adjusted Performance

0 of 100

Very 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.

Toast Inc

Risk-Adjusted Performance

17 of 100

Solid

Compared to the overall equity markets, risk-adjusted returns on investments in Toast Inc are ranked lower than 17 (%) of all global equities and portfolios over the last 90 days. In spite of comparatively abnormal basic indicators, Toast unveiled solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Clear Secure and Toast

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

The idea behind Clear Secure and Toast Inc 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 Pattern Recognition module to use different Pattern Recognition models to time the market across multiple global exchanges.