Correlation Between EPlus and Clear Secure

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

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

Diversification Opportunities for EPlus and Clear Secure

0.75

Correlation Coefficient

EPlus  Clear Secure

Poor diversification

The 3 months correlation between EPlus and Clear is 0.75. Overlapping area represents the amount of risk that can be diversified away by holding ePlus inc and Clear Secure in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Clear Secure and EPlus 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 ePlus inc are associated (or correlated) with Clear Secure. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Clear Secure has no effect on the direction of EPlus i.e., EPlus and Clear Secure go up and down completely randomly.

Pair Corralation between EPlus and Clear Secure

Given the investment horizon of 90 days ePlus inc is expected to under-perform the Clear Secure. But the stock apears to be less risky and, when comparing its historical volatility, ePlus inc is 1.41 times less risky than Clear Secure. The stock trades about -0.06 of its potential returns per unit of risk. The Clear Secure is currently generating about -0.01 of returns per unit of risk over similar time horizon. If you would invest  3,016  in Clear Secure on September 13, 2024 and sell it today you would lose (237.00) from holding Clear Secure or give up 7.86% of portfolio value over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Significant
Accuracy	98.44%
Values	Daily Returns

ePlus inc  vs.  Clear Secure

ePlus inc

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days ePlus inc has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of latest unfluctuating performance, the Stock's basic indicators remain stable and the newest uproar on Wall Street may also be a sign of mid-term gains for the firm private investors.

Clear Secure

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Clear Secure has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of comparatively stable basic indicators, Clear Secure is not utilizing all of its potentials. The latest stock price uproar, may contribute to short-horizon losses for the private investors.

Pair Trading with EPlus and Clear Secure

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

The idea behind ePlus inc and Clear Secure 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 Equity Analysis module to research over 250,000 global equities including funds, stocks and ETFs to find investment opportunities.