Correlation Between Clearwater Paper and Mediaalpha Inc

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Can any of the company-specific risk be diversified away by investing in both Clearwater Paper and Mediaalpha Inc 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 Mediaalpha Inc 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 Mediaalpha Inc Cl, you can compare the effects of market volatilities on Clearwater Paper and Mediaalpha Inc 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 Mediaalpha Inc. Check out your portfolio center. Please also check ongoing floating volatility patterns of Clearwater Paper and Mediaalpha Inc.

Diversification Opportunities for Clearwater Paper and Mediaalpha Inc

  Correlation Coefficient

Very good diversification

The 3 months correlation between Clearwater and Mediaalpha is -0.38. Overlapping area represents the amount of risk that can be diversified away by holding Clearwater Paper Corp and Mediaalpha Inc Cl in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Mediaalpha Inc 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 Mediaalpha Inc. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Mediaalpha Inc has no effect on the direction of Clearwater Paper i.e., Clearwater Paper and Mediaalpha Inc go up and down completely randomly.

Pair Corralation between Clearwater Paper and Mediaalpha Inc

Considering the 90-day investment horizon Clearwater Paper Corp is expected to under-perform the Mediaalpha Inc. But the stock apears to be less risky and, when comparing its historical volatility, Clearwater Paper Corp is 1.64 times less risky than Mediaalpha Inc. The stock trades about -0.07 of its potential returns per unit of risk. The Mediaalpha Inc Cl is currently generating about 0.1 of returns per unit of risk over similar time horizon. If you would invest  1,085  in Mediaalpha Inc Cl on August 28, 2022 and sell it today you would earn a total of  119.00  from holding Mediaalpha Inc Cl or generate 10.97% return on investment over 90 days.
Time Period3 Months [change]
DirectionMoves Against 
ValuesDaily Returns

Clearwater Paper Corp  vs.  Mediaalpha Inc Cl

 Performance (%) 
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

Mediaalpha Inc 
Mediaalpha Performance
10 of 100
Compared to the overall equity markets, risk-adjusted returns on investments in Mediaalpha Inc Cl are ranked lower than 10 (%) of all global equities and portfolios over the last 90 days. In spite of fairly uncertain basic indicators, Mediaalpha Inc showed solid returns over the last few months and may actually be approaching a breakup point.

Mediaalpha Price Channel

Clearwater Paper and Mediaalpha Inc Volatility Contrast

   Predicted Return Density   

Pair Trading with Clearwater Paper and Mediaalpha Inc

The main advantage of trading using opposite Clearwater Paper and Mediaalpha Inc positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Clearwater Paper position performs unexpectedly, Mediaalpha Inc 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 Mediaalpha Inc will offset losses from the drop in Mediaalpha Inc's long position.
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The idea behind Clearwater Paper Corp and Mediaalpha Inc Cl 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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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.

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