Correlation Between Wag Group and Clearwater Analytics

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

By analyzing existing cross correlation between Wag Group Co and Clearwater Analytics Holdings, you can compare the effects of market volatilities on Wag Group and Clearwater Analytics 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 Wag Group with a short position of Clearwater Analytics. Check out your portfolio center. Please also check ongoing floating volatility patterns of Wag Group and Clearwater Analytics.

Diversification Opportunities for Wag Group and Clearwater Analytics

-0.82

Correlation Coefficient

Wag Group  Clearwater Analytics

Pay attention - limited upside

The 3 months correlation between Wag and Clearwater is -0.82. Overlapping area represents the amount of risk that can be diversified away by holding Wag Group Co and Clearwater Analytics Holdings in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Clearwater Analytics and Wag Group 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 Wag Group Co are associated (or correlated) with Clearwater Analytics. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Clearwater Analytics has no effect on the direction of Wag Group i.e., Wag Group and Clearwater Analytics go up and down completely randomly.

Pair Corralation between Wag Group and Clearwater Analytics

Considering the 90-day investment horizon Wag Group Co is expected to under-perform the Clearwater Analytics. In addition to that, Wag Group is 2.32 times more volatile than Clearwater Analytics Holdings. It trades about -0.07 of its total potential returns per unit of risk. Clearwater Analytics Holdings is currently generating about 0.05 per unit of volatility. If you would invest  1,852  in Clearwater Analytics Holdings on September 12, 2024 and sell it today you would earn a total of  1,050  from holding Clearwater Analytics Holdings or generate 56.7% return on investment over 90 days.

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

Wag Group Co  vs.  Clearwater Analytics Holdings

Wag Group

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Wag Group Co 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 technical and fundamental 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.

Clearwater Analytics

Risk-Adjusted Performance

11 of 100

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Clearwater Analytics Holdings are ranked lower than 11 (%) of all global equities and portfolios over the last 90 days. In spite of very weak basic indicators, Clearwater Analytics displayed solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Wag Group and Clearwater Analytics

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

The idea behind Wag Group Co and Clearwater Analytics Holdings 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.

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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 Insider Screener module to find insiders across different sectors to evaluate their impact on performance.