Correlation Between Pennant and Clarus Corp

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

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

Diversification Opportunities for Pennant and Clarus Corp

-0.59

Correlation Coefficient

Pennant  Clarus Corp

Excellent diversification

The 3 months correlation between Pennant and Clarus is -0.59. Overlapping area represents the amount of risk that can be diversified away by holding Pennant Group and Clarus Corp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Clarus Corp and Pennant 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 Pennant Group are associated (or correlated) with Clarus Corp. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Clarus Corp has no effect on the direction of Pennant i.e., Pennant and Clarus Corp go up and down completely randomly.

Pair Corralation between Pennant and Clarus Corp

Given the investment horizon of 90 days Pennant Group is expected to under-perform the Clarus Corp. But the stock apears to be less risky and, when comparing its historical volatility, Pennant Group is 1.31 times less risky than Clarus Corp. The stock trades about -0.13 of its potential returns per unit of risk. The Clarus Corp is currently generating about -0.01 of returns per unit of risk over similar time horizon. If you would invest  328.00  in Clarus Corp on May 4, 2025 and sell it today you would lose (12.00) from holding Clarus Corp or give up 3.66% of portfolio value over 90 days.

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

Pennant Group  vs.  Clarus Corp

Pennant Group

Risk-Adjusted Performance

Very Weak

Over the last 90 days Pennant Group has generated negative risk-adjusted returns adding no value to investors with long positions. Despite unsteady performance in the last few months, the Stock's basic indicators remain nearly stable which may send shares a bit higher in September 2025. The current disturbance may also be a sign of long-run up-swing for the company stockholders.

Clarus Corp

Risk-Adjusted Performance

Very Weak

Over the last 90 days Clarus Corp has generated negative risk-adjusted returns adding no value to investors with long positions. Even with relatively invariable basic indicators, Clarus Corp is not utilizing all of its potentials. The current stock price agitation, may contribute to short-term losses for the retail investors.

Pair Trading with Pennant and Clarus Corp

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

The idea behind Pennant Group and Clarus 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.

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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 Economic Indicators module to top statistical indicators that provide insights into how an economy is performing.