Correlation Between Clearwater Paper and Allscripts Hlthcare

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

Diversification Opportunities for Clearwater Paper and Allscripts Hlthcare

-0.02
  Correlation Coefficient

Good diversification

The 3 months correlation between Clearwater and Allscripts is -0.02. Overlapping area represents the amount of risk that can be diversified away by holding Clearwater Paper Corp and Allscripts Hlthcare in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Allscripts Hlthcare 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 Allscripts Hlthcare. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Allscripts Hlthcare has no effect on the direction of Clearwater Paper i.e., Clearwater Paper and Allscripts Hlthcare go up and down completely randomly.

Pair Corralation between Clearwater Paper and Allscripts Hlthcare

Considering the 90-day investment horizon Clearwater Paper Corp is expected to under-perform the Allscripts Hlthcare. In addition to that, Clearwater Paper is 1.31 times more volatile than Allscripts Hlthcare. It trades about -0.16 of its total potential returns per unit of risk. Allscripts Hlthcare is currently generating about 0.31 per unit of volatility. If you would invest  1,470  in Allscripts Hlthcare on August 31, 2022 and sell it today you would earn a total of  346.00  from holding Allscripts Hlthcare or generate 23.54% return on investment over 90 days.
Time Period3 Months [change]
DirectionMoves Against 
StrengthInsignificant
Accuracy95.24%
ValuesDaily Returns

Clearwater Paper Corp  vs.  Allscripts Hlthcare

 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

Allscripts Hlthcare 
Allscripts Performance
4 of 100
Compared to the overall equity markets, risk-adjusted returns on investments in Allscripts Hlthcare are ranked lower than 4 (%) of all global equities and portfolios over the last 90 days. In spite of fairly unsteady basic indicators, Allscripts Hlthcare may actually be approaching a critical reversion point that can send shares even higher in December 2022.

Allscripts Price Channel

Clearwater Paper and Allscripts Hlthcare Volatility Contrast

   Predicted Return Density   
       Returns  

Pair Trading with Clearwater Paper and Allscripts Hlthcare

The main advantage of trading using opposite Clearwater Paper and Allscripts Hlthcare positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Clearwater Paper position performs unexpectedly, Allscripts Hlthcare 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 Allscripts Hlthcare will offset losses from the drop in Allscripts Hlthcare's long position.
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The idea behind Clearwater Paper Corp and Allscripts Hlthcare 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 Equity Analysis module to research over 250,000 global equities including funds, stocks and ETFs to find investment opportunities.

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