Correlation Between Strategic Investments and Waste Connections
Can any of the company-specific risk be diversified away by investing in both Strategic Investments and Waste Connections 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 Strategic Investments and Waste Connections into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Strategic Investments AS and Waste Connections, you can compare the effects of market volatilities on Strategic Investments and Waste Connections 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 Strategic Investments with a short position of Waste Connections. Check out your portfolio center. Please also check ongoing floating volatility patterns of Strategic Investments and Waste Connections.
Diversification Opportunities for Strategic Investments and Waste Connections
-0.17 | Correlation Coefficient |
Good diversification
The 3 months correlation between Strategic and Waste is -0.17. Overlapping area represents the amount of risk that can be diversified away by holding Strategic Investments AS and Waste Connections in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Waste Connections and Strategic Investments 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 Strategic Investments AS are associated (or correlated) with Waste Connections. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Waste Connections has no effect on the direction of Strategic Investments i.e., Strategic Investments and Waste Connections go up and down completely randomly.
Pair Corralation between Strategic Investments and Waste Connections
Assuming the 90 days horizon Strategic Investments is expected to generate 9.59 times less return on investment than Waste Connections. In addition to that, Strategic Investments is 2.48 times more volatile than Waste Connections. It trades about 0.02 of its total potential returns per unit of risk. Waste Connections is currently generating about 0.37 per unit of volatility. If you would invest 16,279 in Waste Connections on September 5, 2024 and sell it today you would earn a total of 1,856 from holding Waste Connections or generate 11.4% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 95.65% |
| Values | Daily Returns |
Strategic Investments AS vs. Waste Connections
Performance |
| Timeline |
| Strategic Investments |
| Waste Connections |
Strategic Investments and Waste Connections Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Strategic Investments and Waste Connections
The main advantage of trading using opposite Strategic Investments and Waste Connections positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Strategic Investments position performs unexpectedly, Waste Connections 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 Connections will offset losses from the drop in Waste Connections' long position.| Strategic Investments vs. Blackstone Group | Strategic Investments vs. BlackRock | Strategic Investments vs. The Bank of | Strategic Investments vs. Ameriprise Financial |
| Waste Connections vs. GALENA MINING LTD | Waste Connections vs. PennantPark Investment | Waste Connections vs. Chuangs China Investments | Waste Connections vs. Strategic Investments AS |
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 Equity Analysis module to research over 250,000 global equities including funds, stocks and ETFs to find investment opportunities.
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