Correlation Between Clearwater Paper and Bed Bath

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

Diversification Opportunities for Clearwater Paper and Bed Bath

0.63
  Correlation Coefficient

Poor diversification

The 3 months correlation between Clearwater and Bed Bath is 0.63. Overlapping area represents the amount of risk that can be diversified away by holding Clearwater Paper Corp and Bed Bath Beyond in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Bed Bath Beyond and Clearwater Paper 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 Clearwater Paper Corp are associated (or correlated) with Bed Bath. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Bed Bath Beyond has no effect on the direction of Clearwater Paper i.e., Clearwater Paper and Bed Bath go up and down completely randomly.

Pair Corralation between Clearwater Paper and Bed Bath

Considering the 90-day investment horizon Clearwater Paper Corp is expected to generate 0.55 times more return on investment than Bed Bath. However, Clearwater Paper Corp is 1.81 times less risky than Bed Bath. It trades about 0.02 of its potential returns per unit of risk. Bed Bath Beyond is currently generating about -0.24 per unit of risk. If you would invest  3,761  in Clearwater Paper Corp on August 30, 2022 and sell it today you would earn a total of  39.00  from holding Clearwater Paper Corp or generate 1.04% return on investment over 90 days.
Time Period3 Months [change]
DirectionMoves Together 
StrengthSignificant
Accuracy100.0%
ValuesDaily Returns

Clearwater Paper Corp  vs.  Bed Bath Beyond

 Performance (%) 
       Timeline  
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 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 and Bed Bath Volatility Contrast

   Predicted Return Density   
       Returns  

Pair Trading with Clearwater Paper and Bed Bath

The main advantage of trading using opposite Clearwater Paper and Bed Bath positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Clearwater Paper position performs unexpectedly, Bed Bath 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 Bed Bath will offset losses from the drop in Bed Bath's long position.
Clearwater Paper vs. Upm-Kymmene Oyj ADR
Clearwater Paper vs. STORA ENSO OYJ
Clearwater Paper vs. STORA ENSO OYJ
Clearwater Paper vs. Mondi Plc Ord
The idea behind Clearwater Paper Corp and Bed Bath Beyond 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.
Bed Bath vs. Aarons Holdings
Bed Bath vs. Alibaba Group Holding
Bed Bath vs. Best Buy Company
Bed Bath vs. Big Lots
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 Stock Tickers module to use high-impact, comprehensive, and customizable stock tickers that can be easily integrated to any websites.

Other Complementary Tools

Watchlist Optimization
Optimize watchlists to build efficient portfolio or rebalance existing positions based on mean-variance optimization algorithm
Go
Global Markets Map
Get a quick overview of global market snapshot using zoomable world map. Drill down to check world indexes
Go
Theme Ratings
Determine theme ratings based on digital equity recommendations. Macroaxis theme ratings are based on combination of fundamental analysis and risk-adjusted market performance
Go
Options Analysis
Analyze and evaluate options and option chains as a potential hedge for your portfolios
Go
Insider Screener
Find insiders across different sectors to evaluate their impact on performance
Go
Insider Screener
Find insiders across different sectors to evaluate their impact on performance
Go
Insider Screener
Find insiders across different sectors to evaluate their impact on performance
Go
Idea Optimizer
Use advanced portfolio builder with pre-computed micro ideas to build optimal portfolio
Go
Analyst Recommendations
Analyst recommendations and target price estimates broken down by several categories
Go
Volatility Analysis
Get historical volatility and risk analysis based on latest market data
Go
Stock Tickers
Use high-impact, comprehensive, and customizable stock tickers that can be easily integrated to any websites
Go