Correlation Between Ihuman and Waste Management
Can any of the company-specific risk be diversified away by investing in both Ihuman 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 Ihuman and Waste Management into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Ihuman Inc and Waste Management, you can compare the effects of market volatilities on Ihuman 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 Ihuman with a short position of Waste Management. Check out your portfolio center. Please also check ongoing floating volatility patterns of Ihuman and Waste Management.
Diversification Opportunities for Ihuman and Waste Management
-0.17 | Correlation Coefficient |
Good diversification
The 3 months correlation between Ihuman and Waste is -0.17. Overlapping area represents the amount of risk that can be diversified away by holding Ihuman Inc and Waste Management in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Waste Management and Ihuman 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 Ihuman Inc 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 Ihuman i.e., Ihuman and Waste Management go up and down completely randomly.
Pair Corralation between Ihuman and Waste Management
Allowing for the 90-day total investment horizon Ihuman Inc is expected to under-perform the Waste Management. In addition to that, Ihuman is 3.18 times more volatile than Waste Management. It trades about -0.02 of its total potential returns per unit of risk. Waste Management is currently generating about 0.09 per unit of volatility. If you would invest 15,944 in Waste Management on August 31, 2024 and sell it today you would earn a total of 6,878 from holding Waste Management or generate 43.14% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Ihuman Inc vs. Waste Management
Performance |
| Timeline |
| Ihuman Inc |
| Waste Management |
Ihuman and Waste Management Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Ihuman and Waste Management
The main advantage of trading using opposite Ihuman and Waste Management positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Ihuman 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.| Ihuman vs. Boqii Holding Limited | Ihuman vs. Lixiang Education Holding | Ihuman vs. Huize Holding | Ihuman vs. Kuke Music Holding |
| Waste Management vs. Waste Connections | Waste Management vs. Clean Harbors | Waste Management vs. Casella Waste Systems | Waste Management vs. Gfl Environmental Holdings |
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 Forecasting module to use basic forecasting models to generate price predictions and determine price momentum.
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