Correlation Between Clearwater Analytics and NXP Semiconductors
Can any of the company-specific risk be diversified away by investing in both Clearwater Analytics and NXP Semiconductors 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 Clearwater Analytics and NXP Semiconductors into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Clearwater Analytics Holdings and NXP Semiconductors NV, you can compare the effects of market volatilities on Clearwater Analytics and NXP Semiconductors 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 Clearwater Analytics with a short position of NXP Semiconductors. Check out your portfolio center. Please also check ongoing floating volatility patterns of Clearwater Analytics and NXP Semiconductors.
Diversification Opportunities for Clearwater Analytics and NXP Semiconductors
-0.42 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Clearwater and NXP is -0.42. Overlapping area represents the amount of risk that can be diversified away by holding Clearwater Analytics Holdings and NXP Semiconductors NV in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on NXP Semiconductors and Clearwater Analytics 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 Clearwater Analytics Holdings are associated (or correlated) with NXP Semiconductors. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of NXP Semiconductors has no effect on the direction of Clearwater Analytics i.e., Clearwater Analytics and NXP Semiconductors go up and down completely randomly.
Pair Corralation between Clearwater Analytics and NXP Semiconductors
Given the investment horizon of 90 days Clearwater Analytics Holdings is expected to generate 1.2 times more return on investment than NXP Semiconductors. However, Clearwater Analytics is 1.2 times more volatile than NXP Semiconductors NV. It trades about 0.18 of its potential returns per unit of risk. NXP Semiconductors NV is currently generating about -0.02 per unit of risk. If you would invest 2,409 in Clearwater Analytics Holdings on August 31, 2024 and sell it today you would earn a total of 708.00 from holding Clearwater Analytics Holdings or generate 29.39% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Clearwater Analytics Holdings vs. NXP Semiconductors NV
Performance |
| Timeline |
| Clearwater Analytics |
| NXP Semiconductors |
Clearwater Analytics and NXP Semiconductors Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Clearwater Analytics and NXP Semiconductors
The main advantage of trading using opposite Clearwater Analytics and NXP Semiconductors positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Clearwater Analytics position performs unexpectedly, NXP Semiconductors 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 NXP Semiconductors will offset losses from the drop in NXP Semiconductors' long position.| Clearwater Analytics vs. Paylocity Holdng | Clearwater Analytics vs. Alkami Technology | Clearwater Analytics vs. Expensify | Clearwater Analytics vs. Envestnet |
| NXP Semiconductors vs. Analog Devices | NXP Semiconductors vs. Qualcomm Incorporated | NXP Semiconductors vs. Broadcom | NXP Semiconductors vs. Microchip Technology |
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 AI Portfolio Architect module to use AI to generate optimal portfolios and find profitable investment opportunities.
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