Correlation Between INPOST SA and Waste Management
Can any of the company-specific risk be diversified away by investing in both INPOST SA and Waste Management 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 INPOST SA and Waste Management into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between INPOST SA EO and Waste Management, you can compare the effects of market volatilities on INPOST SA and Waste Management 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 INPOST SA with a short position of Waste Management. Check out your portfolio center. Please also check ongoing floating volatility patterns of INPOST SA and Waste Management.
Diversification Opportunities for INPOST SA and Waste Management
0.3 | Correlation Coefficient |
Weak diversification
The 3 months correlation between INPOST and Waste is 0.3. Overlapping area represents the amount of risk that can be diversified away by holding INPOST SA EO and Waste Management in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Waste Management and INPOST SA 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 INPOST SA EO are associated (or correlated) with Waste Management. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Waste Management has no effect on the direction of INPOST SA i.e., INPOST SA and Waste Management go up and down completely randomly.
Pair Corralation between INPOST SA and Waste Management
Assuming the 90 days horizon INPOST SA EO is expected to generate 2.45 times more return on investment than Waste Management. However, INPOST SA is 2.45 times more volatile than Waste Management. It trades about 0.21 of its potential returns per unit of risk. Waste Management is currently generating about 0.26 per unit of risk. If you would invest 1,575 in INPOST SA EO on December 4, 2024 and sell it today you would earn a total of 88.00 from holding INPOST SA EO or generate 5.59% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
INPOST SA EO vs. Waste Management
Performance |
| Timeline |
| INPOST SA EO |
| Waste Management |
INPOST SA and Waste Management Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with INPOST SA and Waste Management
The main advantage of trading using opposite INPOST SA and Waste Management positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if INPOST SA position performs unexpectedly, Waste Management 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 Waste Management will offset losses from the drop in Waste Management's long position.| INPOST SA vs. United Airlines Holdings | INPOST SA vs. MEDICAL FACILITIES NEW | INPOST SA vs. Peijia Medical Limited | INPOST SA vs. Compugroup Medical SE |
| Waste Management vs. HK Electric Investments | Waste Management vs. PennantPark Investment | Waste Management vs. Scottish Mortgage Investment | Waste Management vs. JLF 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 Correlation Analysis module to reduce portfolio risk simply by holding instruments which are not perfectly correlated.
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