Correlation Between Cleanaway Waste and Whitehaven Coal
Can any of the company-specific risk be diversified away by investing in both Cleanaway Waste and Whitehaven Coal 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 Cleanaway Waste and Whitehaven Coal into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Cleanaway Waste Management and Whitehaven Coal, you can compare the effects of market volatilities on Cleanaway Waste and Whitehaven Coal 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 Cleanaway Waste with a short position of Whitehaven Coal. Check out your portfolio center. Please also check ongoing floating volatility patterns of Cleanaway Waste and Whitehaven Coal.
Diversification Opportunities for Cleanaway Waste and Whitehaven Coal
0.34 | Correlation Coefficient |
Weak diversification
The 3 months correlation between Cleanaway and Whitehaven is 0.34. Overlapping area represents the amount of risk that can be diversified away by holding Cleanaway Waste Management and Whitehaven Coal in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Whitehaven Coal and Cleanaway Waste 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 Cleanaway Waste Management are associated (or correlated) with Whitehaven Coal. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Whitehaven Coal has no effect on the direction of Cleanaway Waste i.e., Cleanaway Waste and Whitehaven Coal go up and down completely randomly.
Pair Corralation between Cleanaway Waste and Whitehaven Coal
Assuming the 90 days trading horizon Cleanaway Waste Management is expected to generate 0.77 times more return on investment than Whitehaven Coal. However, Cleanaway Waste Management is 1.3 times less risky than Whitehaven Coal. It trades about 0.05 of its potential returns per unit of risk. Whitehaven Coal is currently generating about 0.01 per unit of risk. If you would invest 236.00 in Cleanaway Waste Management on September 4, 2024 and sell it today you would earn a total of 55.00 from holding Cleanaway Waste Management or generate 23.31% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Cleanaway Waste Management vs. Whitehaven Coal
Performance |
| Timeline |
| Cleanaway Waste Mana |
| Whitehaven Coal |
Cleanaway Waste and Whitehaven Coal Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Cleanaway Waste and Whitehaven Coal
The main advantage of trading using opposite Cleanaway Waste and Whitehaven Coal positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Cleanaway Waste position performs unexpectedly, Whitehaven Coal 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 Whitehaven Coal will offset losses from the drop in Whitehaven Coal's long position.| Cleanaway Waste vs. Aneka Tambang Tbk | Cleanaway Waste vs. ANZ Group Holdings | Cleanaway Waste vs. Australia and New | Cleanaway Waste vs. ANZ Group Holdings |
| Whitehaven Coal vs. Westpac Banking | Whitehaven Coal vs. ABACUS STORAGE KING | Whitehaven Coal vs. Odyssey Energy | Whitehaven Coal vs. Summit Resources Limited |
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 Balance Of Power module to check stock momentum by analyzing Balance Of Power indicator and other technical ratios.
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