Correlation Between CLARIVATE PLC and Xerox Corp

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

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

Diversification Opportunities for CLARIVATE PLC and Xerox Corp

0.64

Correlation Coefficient

CLARIVATE PLC  Xerox Corp

Poor diversification

The 3 months correlation between CLARIVATE and Xerox is 0.64. Overlapping area represents the amount of risk that can be diversified away by holding CLARIVATE PLC and Xerox Corp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Xerox Corp 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 Xerox Corp. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Xerox Corp has no effect on the direction of CLARIVATE PLC i.e., CLARIVATE PLC and Xerox Corp go up and down completely randomly.

Pair Corralation between CLARIVATE PLC and Xerox Corp

Given the investment horizon of 90 days CLARIVATE PLC is expected to generate 0.99 times more return on investment than Xerox Corp. However, CLARIVATE PLC is 1.01 times less risky than Xerox Corp. It trades about -0.02 of its potential returns per unit of risk. Xerox Corp is currently generating about -0.05 per unit of risk. If you would invest  707.00  in CLARIVATE PLC on May 1, 2025 and sell it today you would lose (302.00) from holding CLARIVATE PLC or give up 42.72% of portfolio value over 90 days.

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

CLARIVATE PLC  vs.  Xerox Corp

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.

Xerox Corp

Risk-Adjusted Performance

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Xerox Corp are ranked lower than 6 (%) of all global equities and portfolios over the last 90 days. In spite of fairly uncertain basic indicators, Xerox Corp showed solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with CLARIVATE PLC and Xerox Corp

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

The idea behind CLARIVATE PLC and Xerox Corp 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 USA ETFs module to find actively traded Exchange Traded Funds (ETF) in USA.