Correlation Between Bed Bath and Clearwater Paper

Specify exactly 2 symbols:
Can any of the company-specific risk be diversified away by investing in both Bed Bath and Clearwater Paper 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 Bed Bath and Clearwater Paper into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Bed Bath Beyond and Clearwater Paper Corp, you can compare the effects of market volatilities on Bed Bath and Clearwater Paper 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 Bed Bath with a short position of Clearwater Paper. Check out your portfolio center. Please also check ongoing floating volatility patterns of Bed Bath and Clearwater Paper.

Diversification Opportunities for Bed Bath and Clearwater Paper

0.6
  Correlation Coefficient

Poor diversification

The 3 months correlation between Bed Bath and Clearwater is 0.6. Overlapping area represents the amount of risk that can be diversified away by holding Bed Bath Beyond and Clearwater Paper Corp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Clearwater Paper Corp and Bed Bath 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 Bed Bath Beyond are associated (or correlated) with Clearwater Paper. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Clearwater Paper Corp has no effect on the direction of Bed Bath i.e., Bed Bath and Clearwater Paper go up and down completely randomly.

Pair Corralation between Bed Bath and Clearwater Paper

Given the investment horizon of 90 days Bed Bath Beyond is expected to under-perform the Clearwater Paper. In addition to that, Bed Bath is 3.4 times more volatile than Clearwater Paper Corp. It trades about -0.02 of its total potential returns per unit of risk. Clearwater Paper Corp is currently generating about 0.04 per unit of volatility. If you would invest  3,479  in Clearwater Paper Corp on September 1, 2022 and sell it today you would earn a total of  373.00  from holding Clearwater Paper Corp or generate 10.72% return on investment over 90 days.
Time Period3 Months [change]
DirectionMoves Together 
StrengthSignificant
Accuracy99.2%
ValuesDaily Returns

Bed Bath Beyond  vs.  Clearwater Paper Corp

 Performance (%) 
       Timeline  
Bed Bath Beyond 
Bed Bath Performance
0 of 100
Over the last 90 days Bed Bath Beyond has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of conflicting performance in the last few months, the Stock's fundamental drivers remain fairly strong which may send shares a bit higher in December 2022. The current disturbance may also be a sign of long term up-swing for the company investors.

Bed Bath Price Channel

Clearwater Paper Corp 
Clearwater Performance
0 of 100
Over the last 90 days Clearwater Paper Corp has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of latest weak performance, the Stock's essential indicators remain stable and the latest fuss on Wall Street may also be a sign of long-term gains for the venture sophisticated investors.

Clearwater Price Channel

Bed Bath and Clearwater Paper Volatility Contrast

   Predicted Return Density   
       Returns  

Pair Trading with Bed Bath and Clearwater Paper

The main advantage of trading using opposite Bed Bath and Clearwater Paper positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Bed Bath position performs unexpectedly, Clearwater Paper 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 Paper will offset losses from the drop in Clearwater Paper's long position.
Bed Bath vs. Aarons Holdings
Bed Bath vs. Dollar General Corp
Bed Bath vs. Costco Wholesale
Bed Bath vs. Alibaba Group Holding
The idea behind Bed Bath Beyond and Clearwater Paper 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.
Clearwater Paper vs. Holmen Ab
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 Global Markets Map module to get a quick overview of global market snapshot using zoomable world map. Drill down to check world indexes.

Other Complementary Tools

Equity Analysis
Research over 250,000 global equities including funds, stocks and ETFs to find investment opportunities
Go
Portfolio Manager
State of the art Portfolio Manager to monitor and improve performance of your invested capital
Go
Stock Tickers
Use high-impact, comprehensive, and customizable stock tickers that can be easily integrated to any websites
Go
Equity Analysis
Research over 250,000 global equities including funds, stocks and ETFs to find investment opportunities
Go
Stock Tickers
Use high-impact, comprehensive, and customizable stock tickers that can be easily integrated to any websites
Go
Equity Valuation
Check real value of public entities based on technical and fundamental data
Go
Insider Screener
Find insiders across different sectors to evaluate their impact on performance
Go
Options Analysis
Analyze and evaluate options and option chains as a potential hedge for your portfolios
Go
Stock Tickers
Use high-impact, comprehensive, and customizable stock tickers that can be easily integrated to any websites
Go
Options Analysis
Analyze and evaluate options and option chains as a potential hedge for your portfolios
Go
Aroon Oscillator
Analyze current equity momentum using Aroon Oscillator and other momentum ratios
Go
Headlines Timeline
Stay connected to all market stories and filter out noise. Drill down to analyze hype elasticity
Go