Correlation Between Clearwater Analytics and Zepp Health
Can any of the company-specific risk be diversified away by investing in both Clearwater Analytics and Zepp 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 Clearwater Analytics and Zepp Health 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 Zepp Health Corp, you can compare the effects of market volatilities on Clearwater Analytics and Zepp 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 Clearwater Analytics with a short position of Zepp Health. Check out your portfolio center. Please also check ongoing floating volatility patterns of Clearwater Analytics and Zepp Health.
Diversification Opportunities for Clearwater Analytics and Zepp Health
-0.45 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Clearwater and Zepp is -0.45. Overlapping area represents the amount of risk that can be diversified away by holding Clearwater Analytics Holdings and Zepp Health Corp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Zepp Health Corp 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 Zepp Health. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Zepp Health Corp has no effect on the direction of Clearwater Analytics i.e., Clearwater Analytics and Zepp Health go up and down completely randomly.
Pair Corralation between Clearwater Analytics and Zepp Health
Given the investment horizon of 90 days Clearwater Analytics Holdings is expected to generate 0.63 times more return on investment than Zepp Health. However, Clearwater Analytics Holdings is 1.59 times less risky than Zepp Health. It trades about 0.24 of its potential returns per unit of risk. Zepp Health Corp is currently generating about -0.12 per unit of risk. If you would invest 2,685 in Clearwater Analytics Holdings on August 30, 2024 and sell it today you would earn a total of 536.00 from holding Clearwater Analytics Holdings or generate 19.96% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 95.65% |
| Values | Daily Returns |
Clearwater Analytics Holdings vs. Zepp Health Corp
Performance |
| Timeline |
| Clearwater Analytics |
| Zepp Health Corp |
Clearwater Analytics and Zepp Health Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Clearwater Analytics and Zepp Health
The main advantage of trading using opposite Clearwater Analytics and Zepp Health positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Clearwater Analytics position performs unexpectedly, Zepp 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 Zepp Health will offset losses from the drop in Zepp Health's long position.| Clearwater Analytics vs. C3 Ai Inc | Clearwater Analytics vs. Shopify | Clearwater Analytics vs. Workday | Clearwater Analytics vs. Intuit Inc |
| Zepp Health vs. VOXX International | Zepp Health vs. LG Display Co | Zepp Health vs. Vizio Holding Corp | Zepp Health vs. Turtle Beach Corp |
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 Portfolio Backtesting module to avoid under-diversification and over-optimization by backtesting your portfolios.
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