Correlation Between Clearfield and Rimini Street
Can any of the company-specific risk be diversified away by investing in both Clearfield and Rimini Street 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 Clearfield and Rimini Street into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Clearfield and Rimini Street, you can compare the effects of market volatilities on Clearfield and Rimini Street 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 Clearfield with a short position of Rimini Street. Check out your portfolio center. Please also check ongoing floating volatility patterns of Clearfield and Rimini Street.
Diversification Opportunities for Clearfield and Rimini Street
-0.37 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Clearfield and Rimini is -0.37. Overlapping area represents the amount of risk that can be diversified away by holding Clearfield and Rimini Street in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Rimini Street and Clearfield 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 Clearfield are associated (or correlated) with Rimini Street. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Rimini Street has no effect on the direction of Clearfield i.e., Clearfield and Rimini Street go up and down completely randomly.
Pair Corralation between Clearfield and Rimini Street
Given the investment horizon of 90 days Clearfield is expected to generate 0.69 times more return on investment than Rimini Street. However, Clearfield is 1.44 times less risky than Rimini Street. It trades about 0.05 of its potential returns per unit of risk. Rimini Street is currently generating about -0.03 per unit of risk. If you would invest 2,519 in Clearfield on August 28, 2024 and sell it today you would earn a total of 541.00 from holding Clearfield or generate 21.48% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Clearfield vs. Rimini Street
Performance |
| Timeline |
| Clearfield |
| Rimini Street |
Clearfield and Rimini Street Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Clearfield and Rimini Street
The main advantage of trading using opposite Clearfield and Rimini Street positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Clearfield position performs unexpectedly, Rimini Street 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 Rimini Street will offset losses from the drop in Rimini Street's long position.| Clearfield vs. Ichor Holdings | Clearfield vs. Fabrinet | Clearfield vs. Hello Group | Clearfield vs. Ultra Clean Holdings |
| Rimini Street vs. Issuer Direct Corp | Rimini Street vs. Cambium Networks Corp | Rimini Street vs. OneSpan | Rimini Street vs. Kiniksa Pharmaceuticals |
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 Fundamentals Comparison module to compare fundamentals across multiple equities to find investing opportunities.
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