Correlation Between CLARIVATE PLC and BrightView Holdings

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

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

Diversification Opportunities for CLARIVATE PLC and BrightView Holdings

0.62

Correlation Coefficient

CLARIVATE PLC  BrightView Holdings

Poor diversification

The 3 months correlation between CLARIVATE and BrightView is 0.62. Overlapping area represents the amount of risk that can be diversified away by holding CLARIVATE PLC and BrightView Holdings in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on BrightView Holdings and CLARIVATE PLC 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 CLARIVATE PLC are associated (or correlated) with BrightView Holdings. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of BrightView Holdings has no effect on the direction of CLARIVATE PLC i.e., CLARIVATE PLC and BrightView Holdings go up and down completely randomly.

Pair Corralation between CLARIVATE PLC and BrightView Holdings

Given the investment horizon of 90 days CLARIVATE PLC is expected to under-perform the BrightView Holdings. In addition to that, CLARIVATE PLC is 1.71 times more volatile than BrightView Holdings. It trades about -0.02 of its total potential returns per unit of risk. BrightView Holdings is currently generating about 0.06 per unit of volatility. If you would invest  1,460  in BrightView Holdings on February 8, 2025 and sell it today you would earn a total of  121.00  from holding BrightView Holdings or generate 8.29% return on investment over 90 days.

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

CLARIVATE PLC  vs.  BrightView Holdings

CLARIVATE PLC

Risk-Adjusted Performance

Very Weak

Over the last 90 days CLARIVATE PLC has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of latest fragile 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.

BrightView Holdings

Risk-Adjusted Performance

Insignificant

Compared to the overall equity markets, risk-adjusted returns on investments in BrightView Holdings are ranked lower than 4 (%) of all global equities and portfolios over the last 90 days. In spite of fairly weak basic indicators, BrightView Holdings may actually be approaching a critical reversion point that can send shares even higher in June 2025.

Pair Trading with CLARIVATE PLC and BrightView Holdings

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

The idea behind CLARIVATE PLC and BrightView 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 Portfolio Optimization module to compute new portfolio that will generate highest expected return given your specified tolerance for risk.