Correlation Between Johnson Outdoors and Clarus Corp
Can any of the company-specific risk be diversified away by investing in both Johnson Outdoors and Clarus Corp 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 Johnson Outdoors and Clarus Corp into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Johnson Outdoors and Clarus Corp, you can compare the effects of market volatilities on Johnson Outdoors and Clarus Corp 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 Johnson Outdoors with a short position of Clarus Corp. Check out your portfolio center. Please also check ongoing floating volatility patterns of Johnson Outdoors and Clarus Corp.
Diversification Opportunities for Johnson Outdoors and Clarus Corp
0.33 | Correlation Coefficient |
Weak diversification
The 3 months correlation between Johnson and Clarus is 0.33. Overlapping area represents the amount of risk that can be diversified away by holding Johnson Outdoors and Clarus Corp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Clarus Corp and Johnson Outdoors 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 Johnson Outdoors are associated (or correlated) with Clarus Corp. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Clarus Corp has no effect on the direction of Johnson Outdoors i.e., Johnson Outdoors and Clarus Corp go up and down completely randomly.
Pair Corralation between Johnson Outdoors and Clarus Corp
Given the investment horizon of 90 days Johnson Outdoors is expected to under-perform the Clarus Corp. But the stock apears to be less risky and, when comparing its historical volatility, Johnson Outdoors is 1.63 times less risky than Clarus Corp. The stock trades about -0.04 of its potential returns per unit of risk. The Clarus Corp is currently generating about 0.12 of returns per unit of risk over similar time horizon. If you would invest 408.00 in Clarus Corp on August 24, 2024 and sell it today you would earn a total of 30.00 from holding Clarus Corp or generate 7.35% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Johnson Outdoors vs. Clarus Corp
Performance |
| Timeline |
| Johnson Outdoors |
| Clarus Corp |
Johnson Outdoors and Clarus Corp Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Johnson Outdoors and Clarus Corp
The main advantage of trading using opposite Johnson Outdoors and Clarus Corp positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Johnson Outdoors position performs unexpectedly, Clarus Corp 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 Clarus Corp will offset losses from the drop in Clarus Corp's long position.| Johnson Outdoors vs. Vista Outdoor | Johnson Outdoors vs. Clarus Corp | Johnson Outdoors vs. Escalade Incorporated | Johnson Outdoors vs. JAKKS Pacific |
| Clarus Corp vs. Vista Outdoor | Clarus Corp vs. Johnson Outdoors | Clarus Corp vs. Escalade Incorporated | Clarus Corp vs. JAKKS Pacific |
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 Risk-Return Analysis module to view associations between returns expected from investment and the risk you assume.
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