Correlation Between Toast and Clear Secure

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

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

Diversification Opportunities for Toast and Clear Secure

-0.62

Correlation Coefficient

Toast  Clear Secure

Excellent diversification

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

Pair Corralation between Toast and Clear Secure

Given the investment horizon of 90 days Toast Inc is expected to under-perform the Clear Secure. In addition to that, Toast is 1.22 times more volatile than Clear Secure. It trades about -0.03 of its total potential returns per unit of risk. Clear Secure is currently generating about 0.05 per unit of volatility. If you would invest  2,341  in Clear Secure on February 3, 2025 and sell it today you would earn a total of  174.00  from holding Clear Secure or generate 7.43% return on investment over 90 days.

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

Toast Inc  vs.  Clear Secure

Toast Inc

Risk-Adjusted Performance

Very Weak

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

Clear Secure

Risk-Adjusted Performance

Insignificant

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

Pair Trading with Toast and Clear Secure

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

The idea behind Toast Inc and Clear Secure 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 Equity Forecasting module to use basic forecasting models to generate price predictions and determine price momentum.