Correlation Between Susglobal Energy and BacTech Environmental
Can any of the company-specific risk be diversified away by investing in both Susglobal Energy and BacTech Environmental 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 Susglobal Energy and BacTech Environmental into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Susglobal Energy Corp and BacTech Environmental, you can compare the effects of market volatilities on Susglobal Energy and BacTech Environmental 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 Susglobal Energy with a short position of BacTech Environmental. Check out your portfolio center. Please also check ongoing floating volatility patterns of Susglobal Energy and BacTech Environmental.
Diversification Opportunities for Susglobal Energy and BacTech Environmental
0.24 | Correlation Coefficient |
Modest diversification
The 3 months correlation between Susglobal and BacTech is 0.24. Overlapping area represents the amount of risk that can be diversified away by holding Susglobal Energy Corp and BacTech Environmental in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on BacTech Environmental and Susglobal Energy 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 Susglobal Energy Corp are associated (or correlated) with BacTech Environmental. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of BacTech Environmental has no effect on the direction of Susglobal Energy i.e., Susglobal Energy and BacTech Environmental go up and down completely randomly.
Pair Corralation between Susglobal Energy and BacTech Environmental
Given the investment horizon of 90 days Susglobal Energy Corp is expected to generate 1.62 times more return on investment than BacTech Environmental. However, Susglobal Energy is 1.62 times more volatile than BacTech Environmental. It trades about 0.03 of its potential returns per unit of risk. BacTech Environmental is currently generating about 0.01 per unit of risk. If you would invest 15.00 in Susglobal Energy Corp on September 3, 2024 and sell it today you would lose (12.60) from holding Susglobal Energy Corp or give up 84.0% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Susglobal Energy Corp vs. BacTech Environmental
Performance |
| Timeline |
| Susglobal Energy Corp |
| BacTech Environmental |
Susglobal Energy and BacTech Environmental Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Susglobal Energy and BacTech Environmental
The main advantage of trading using opposite Susglobal Energy and BacTech Environmental positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Susglobal Energy position performs unexpectedly, BacTech Environmental 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 BacTech Environmental will offset losses from the drop in BacTech Environmental's long position.| Susglobal Energy vs. BQE Water | Susglobal Energy vs. JPX Global | Susglobal Energy vs. Houston Natural Resources | Susglobal Energy vs. BluMetric Environmental |
| BacTech Environmental vs. Republic Services | BacTech Environmental vs. Waste Connections | BacTech Environmental vs. Clean Harbors | BacTech Environmental 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 Sectors module to list of equity sectors categorizing publicly traded companies based on their primary business activities.
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