Correlation Between Blackbaud and Clearfield

Can any of the company-specific risk be diversified away by investing in both Blackbaud and Clearfield 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 Blackbaud and Clearfield into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between Blackbaud and Clearfield, you can compare the effects of market volatilities on Blackbaud and Clearfield 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 Blackbaud with a short position of Clearfield. Check out your portfolio center. Please also check ongoing floating volatility patterns of Blackbaud and Clearfield.

Diversification Opportunities for Blackbaud and Clearfield

0.26

Correlation Coefficient

Blackbaud  Clearfield

Modest diversification

The 3 months correlation between Blackbaud and Clearfield is 0.26. Overlapping area represents the amount of risk that can be diversified away by holding Blackbaud and Clearfield in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Clearfield and Blackbaud 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 Blackbaud are associated (or correlated) with Clearfield. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Clearfield has no effect on the direction of Blackbaud i.e., Blackbaud and Clearfield go up and down completely randomly.

Pair Corralation between Blackbaud and Clearfield

Given the investment horizon of 90 days Blackbaud is expected to generate 14.25 times less return on investment than Clearfield. But when comparing it to its historical volatility, Blackbaud is 1.36 times less risky than Clearfield. It trades about 0.03 of its potential returns per unit of risk. Clearfield is currently generating about 0.31 of returns per unit of risk over similar time horizon. If you would invest  2,923  in Clearfield on April 26, 2025 and sell it today you would earn a total of  1,477  from holding Clearfield or generate 50.53% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Very Weak
Accuracy	100.0%
Values	Daily Returns

Blackbaud  vs.  Clearfield

Blackbaud

Risk-Adjusted Performance

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in Blackbaud are ranked lower than 2 (%) of all global equities and portfolios over the last 90 days. Despite somewhat strong forward-looking signals, Blackbaud is not utilizing all of its potentials. The newest stock price disturbance, may contribute to short-term losses for the investors.

Clearfield

Risk-Adjusted Performance

Solid

Compared to the overall equity markets, risk-adjusted returns on investments in Clearfield are ranked lower than 24 (%) of all global equities and portfolios over the last 90 days. In spite of rather inconsistent technical and fundamental indicators, Clearfield exhibited solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Blackbaud and Clearfield

The main advantage of trading using opposite Blackbaud and Clearfield positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Blackbaud position performs unexpectedly, Clearfield 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 Clearfield will offset losses from the drop in Clearfield's long position.

The idea behind Blackbaud and Clearfield 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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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 Money Managers module to screen money managers from public funds and ETFs managed around the world.