Correlation Between Clearwater Analytics and Sprout Social
Can any of the company-specific risk be diversified away by investing in both Clearwater Analytics and Sprout Social 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 Sprout Social 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 Sprout Social, you can compare the effects of market volatilities on Clearwater Analytics and Sprout Social 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 Sprout Social. Check out your portfolio center. Please also check ongoing floating volatility patterns of Clearwater Analytics and Sprout Social.
Diversification Opportunities for Clearwater Analytics and Sprout Social
0.22 | Correlation Coefficient |
Modest diversification
The 3 months correlation between Clearwater and Sprout is 0.22. Overlapping area represents the amount of risk that can be diversified away by holding Clearwater Analytics Holdings and Sprout Social in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Sprout Social 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 Sprout Social. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Sprout Social has no effect on the direction of Clearwater Analytics i.e., Clearwater Analytics and Sprout Social go up and down completely randomly.
Pair Corralation between Clearwater Analytics and Sprout Social
Given the investment horizon of 90 days Clearwater Analytics Holdings is expected to generate 0.91 times more return on investment than Sprout Social. However, Clearwater Analytics Holdings is 1.1 times less risky than Sprout Social. It trades about 0.26 of its potential returns per unit of risk. Sprout Social is currently generating about 0.23 per unit of risk. If you would invest 2,645 in Clearwater Analytics Holdings on August 28, 2024 and sell it today you would earn a total of 595.00 from holding Clearwater Analytics Holdings or generate 22.5% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Clearwater Analytics Holdings vs. Sprout Social
Performance |
| Timeline |
| Clearwater Analytics |
| Sprout Social |
Clearwater Analytics and Sprout Social Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Clearwater Analytics and Sprout Social
The main advantage of trading using opposite Clearwater Analytics and Sprout Social positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Clearwater Analytics position performs unexpectedly, Sprout Social 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 Sprout Social will offset losses from the drop in Sprout Social's long position.| Clearwater Analytics vs. Paylocity Holdng | Clearwater Analytics vs. Alkami Technology | Clearwater Analytics vs. Expensify | Clearwater Analytics vs. Envestnet |
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 Content Syndication module to quickly integrate customizable finance content to your own investment portal.
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