Correlation Between Clearfield and Blackbaud

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

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

Diversification Opportunities for Clearfield and Blackbaud

0.51

Correlation Coefficient

Clearfield  Blackbaud

Very weak diversification

The 3 months correlation between Clearfield and Blackbaud is 0.51. Overlapping area represents the amount of risk that can be diversified away by holding Clearfield and Blackbaud in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Blackbaud and Clearfield 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 Clearfield are associated (or correlated) with Blackbaud. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Blackbaud has no effect on the direction of Clearfield i.e., Clearfield and Blackbaud go up and down completely randomly.

Pair Corralation between Clearfield and Blackbaud

Given the investment horizon of 90 days Clearfield is expected to generate 1.36 times more return on investment than Blackbaud. However, Clearfield is 1.36 times more volatile than Blackbaud. It trades about 0.31 of its potential returns per unit of risk. Blackbaud is currently generating about 0.03 per unit of risk. If you would invest  2,925  in Clearfield on April 29, 2025 and sell it today you would earn a total of  1,506  from holding Clearfield or generate 51.49% return on investment over 90 days.

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

Clearfield  vs.  Blackbaud

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.

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.

Pair Trading with Clearfield and Blackbaud

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

The idea behind Clearfield and Blackbaud 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.

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 the Portfolio Center module to all portfolio management and optimization tools to improve performance of your portfolios.