Correlation Between Clarus Corp and Leatt Corp

Can any of the company-specific risk be diversified away by investing in both Clarus Corp and Leatt 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 Clarus Corp and Leatt Corp into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between Clarus Corp and Leatt Corp, you can compare the effects of market volatilities on Clarus Corp and Leatt 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 Clarus Corp with a short position of Leatt Corp. Check out your portfolio center. Please also check ongoing floating volatility patterns of Clarus Corp and Leatt Corp.

Diversification Opportunities for Clarus Corp and Leatt Corp

-0.01

Correlation Coefficient

Clarus Corp  Leatt Corp

Good diversification

The 3 months correlation between Clarus and Leatt is -0.01. Overlapping area represents the amount of risk that can be diversified away by holding Clarus Corp and Leatt Corp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Leatt Corp and Clarus Corp 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 Clarus Corp are associated (or correlated) with Leatt Corp. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Leatt Corp has no effect on the direction of Clarus Corp i.e., Clarus Corp and Leatt Corp go up and down completely randomly.

Pair Corralation between Clarus Corp and Leatt Corp

Given the investment horizon of 90 days Clarus Corp is expected to generate 0.84 times more return on investment than Leatt Corp. However, Clarus Corp is 1.19 times less risky than Leatt Corp. It trades about 0.08 of its potential returns per unit of risk. Leatt Corp is currently generating about -0.1 per unit of risk. If you would invest  408.00  in Clarus Corp on September 3, 2024 and sell it today you would earn a total of  46.00  from holding Clarus Corp or generate 11.27% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Insignificant
Accuracy	100.0%
Values	Daily Returns

Clarus Corp  vs.  Leatt Corp

Clarus Corp

Risk-Adjusted Performance

6 of 100

Modest

Compared to the overall equity markets, risk-adjusted returns on investments in Clarus Corp are ranked lower than 6 (%) of all global equities and portfolios over the last 90 days. Even with relatively weak basic indicators, Clarus Corp may actually be approaching a critical reversion point that can send shares even higher in January 2025.

Leatt Corp

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Leatt Corp has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of uncertain performance in the last few months, the Stock's basic indicators remain comparatively stable which may send shares a bit higher in January 2025. The newest uproar may also be a sign of mid-term up-swing for the firm private investors.

Pair Trading with Clarus Corp and Leatt Corp

The main advantage of trading using opposite Clarus Corp and Leatt Corp positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Clarus Corp position performs unexpectedly, Leatt 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 Leatt Corp will offset losses from the drop in Leatt Corp's long position.

The idea behind Clarus Corp and Leatt Corp pairs trading is to make the combined position market-neutral, meaning the overall market's direction will not affect its win or loss (or potential downside or upside). This can be achieved by designing a pairs trade with two highly correlated stocks or equities that operate in a similar space or sector, making it possible to obtain profits through simple and relatively low-risk investment.

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 Bonds Directory module to find actively traded corporate debentures issued by US companies.