Correlation Between Leggett Platt and Clarus Corp
Can any of the company-specific risk be diversified away by investing in both Leggett Platt 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 Leggett Platt and Clarus Corp into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Leggett Platt Incorporated and Clarus Corp, you can compare the effects of market volatilities on Leggett Platt 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 Leggett Platt with a short position of Clarus Corp. Check out your portfolio center. Please also check ongoing floating volatility patterns of Leggett Platt and Clarus Corp.
Diversification Opportunities for Leggett Platt and Clarus Corp
-0.57 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Leggett and Clarus is -0.57. Overlapping area represents the amount of risk that can be diversified away by holding Leggett Platt Incorporated and Clarus Corp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Clarus Corp and Leggett Platt 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 Leggett Platt Incorporated 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 Leggett Platt i.e., Leggett Platt and Clarus Corp go up and down completely randomly.
Pair Corralation between Leggett Platt and Clarus Corp
Considering the 90-day investment horizon Leggett Platt Incorporated is expected to under-perform the Clarus Corp. In addition to that, Leggett Platt is 1.24 times more volatile than Clarus Corp. It trades about -0.37 of its total potential returns per unit of risk. Clarus Corp is currently generating about 0.11 per unit of volatility. If you would invest 613.00 in Clarus Corp on February 23, 2024 and sell it today you would earn a total of 57.00 from holding Clarus Corp or generate 9.3% return on investment over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Against |
Strength | Very Weak |
Accuracy | 100.0% |
Values | Daily Returns |
Leggett Platt Incorporated vs. Clarus Corp
Performance |
Timeline |
Leggett Platt |
Clarus Corp |
Leggett Platt and Clarus Corp Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with Leggett Platt and Clarus Corp
The main advantage of trading using opposite Leggett Platt and Clarus Corp positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Leggett Platt 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.Leggett Platt vs. Virco Manufacturing | Leggett Platt vs. Energy Focu | Leggett Platt vs. Flexsteel Industries | Leggett Platt vs. Ethan Allen Interiors |
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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.
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