Correlation Between Clearwater Analytics and VTEX

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

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

Diversification Opportunities for Clearwater Analytics and VTEX

0.09

Correlation Coefficient

Clearwater Analytics  VTEX

Significant diversification

The 3 months correlation between Clearwater and VTEX is 0.09. Overlapping area represents the amount of risk that can be diversified away by holding Clearwater Analytics Holdings and VTEX in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on VTEX and Clearwater Analytics 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 Analytics Holdings are associated (or correlated) with VTEX. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of VTEX has no effect on the direction of Clearwater Analytics i.e., Clearwater Analytics and VTEX go up and down completely randomly.

Pair Corralation between Clearwater Analytics and VTEX

Given the investment horizon of 90 days Clearwater Analytics Holdings is expected to under-perform the VTEX. But the stock apears to be less risky and, when comparing its historical volatility, Clearwater Analytics Holdings is 1.33 times less risky than VTEX. The stock trades about -0.09 of its potential returns per unit of risk. The VTEX is currently generating about 0.06 of returns per unit of risk over similar time horizon. If you would invest  537.00  in VTEX on May 4, 2025 and sell it today you would earn a total of  42.00  from holding VTEX or generate 7.82% return on investment over 90 days.

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

Clearwater Analytics Holdings  vs.  VTEX

Clearwater Analytics

Risk-Adjusted Performance

Very Weak

Over the last 90 days Clearwater Analytics Holdings has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of latest inconsistent performance, the Stock's basic indicators remain healthy and the recent disarray on Wall Street may also be a sign of long period gains for the firm investors.

VTEX

Risk-Adjusted Performance

Insignificant

Compared to the overall equity markets, risk-adjusted returns on investments in VTEX are ranked lower than 4 (%) of all global equities and portfolios over the last 90 days. In spite of fairly abnormal technical and fundamental indicators, VTEX may actually be approaching a critical reversion point that can send shares even higher in September 2025.

Pair Trading with Clearwater Analytics and VTEX

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

The idea behind Clearwater Analytics Holdings and VTEX 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 Watchlist Optimization module to optimize watchlists to build efficient portfolios or rebalance existing positions based on the mean-variance optimization algorithm.