Correlation Between CLARIVATE PLC and Alight

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

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

Diversification Opportunities for CLARIVATE PLC and Alight

0.62

Correlation Coefficient

CLARIVATE PLC  Alight

Poor diversification

The 3 months correlation between CLARIVATE and Alight is 0.62. Overlapping area represents the amount of risk that can be diversified away by holding CLARIVATE PLC and Alight Inc in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Alight Inc and CLARIVATE PLC 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 CLARIVATE PLC are associated (or correlated) with Alight. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Alight Inc has no effect on the direction of CLARIVATE PLC i.e., CLARIVATE PLC and Alight go up and down completely randomly.

Pair Corralation between CLARIVATE PLC and Alight

Given the investment horizon of 90 days CLARIVATE PLC is expected to generate 40.15 times less return on investment than Alight. In addition to that, CLARIVATE PLC is 1.15 times more volatile than Alight Inc. It trades about 0.0 of its total potential returns per unit of risk. Alight Inc is currently generating about 0.07 per unit of volatility. If you would invest  516.00  in Alight Inc on May 1, 2025 and sell it today you would earn a total of  38.00  from holding Alight Inc or generate 7.36% return on investment over 90 days.

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

CLARIVATE PLC  vs.  Alight Inc

CLARIVATE PLC

Risk-Adjusted Performance

Very Weak

Over the last 90 days CLARIVATE PLC has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of comparatively stable basic indicators, CLARIVATE PLC is not utilizing all of its potentials. The current stock price uproar, may contribute to short-horizon losses for the private investors.

Alight Inc

Risk-Adjusted Performance

Modest

Compared to the overall equity markets, risk-adjusted returns on investments in Alight Inc are ranked lower than 5 (%) of all global equities and portfolios over the last 90 days. In spite of comparatively uncertain forward indicators, Alight may actually be approaching a critical reversion point that can send shares even higher in August 2025.

Pair Trading with CLARIVATE PLC and Alight

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

The idea behind CLARIVATE PLC and Alight Inc 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 Backtesting module to avoid under-diversification and over-optimization by backtesting your portfolios.