Correlation Between Cleanaway Waste and Lion Biotechnologies
Can any of the company-specific risk be diversified away by investing in both Cleanaway Waste and Lion Biotechnologies 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 Lion Biotechnologies 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 Lion Biotechnologies, you can compare the effects of market volatilities on Cleanaway Waste and Lion Biotechnologies 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 Lion Biotechnologies. Check out your portfolio center. Please also check ongoing floating volatility patterns of Cleanaway Waste and Lion Biotechnologies.
Diversification Opportunities for Cleanaway Waste and Lion Biotechnologies
-0.4 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Cleanaway and Lion is -0.4. Overlapping area represents the amount of risk that can be diversified away by holding Cleanaway Waste Management and Lion Biotechnologies in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Lion Biotechnologies 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 Lion Biotechnologies. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Lion Biotechnologies has no effect on the direction of Cleanaway Waste i.e., Cleanaway Waste and Lion Biotechnologies go up and down completely randomly.
Pair Corralation between Cleanaway Waste and Lion Biotechnologies
Assuming the 90 days trading horizon Cleanaway Waste Management is expected to generate 0.37 times more return on investment than Lion Biotechnologies. However, Cleanaway Waste Management is 2.7 times less risky than Lion Biotechnologies. It trades about 0.12 of its potential returns per unit of risk. Lion Biotechnologies is currently generating about -0.04 per unit of risk. If you would invest 168.00 in Cleanaway Waste Management on September 1, 2024 and sell it today you would earn a total of 8.00 from holding Cleanaway Waste Management or generate 4.76% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Cleanaway Waste Management vs. Lion Biotechnologies
Performance |
| Timeline |
| Cleanaway Waste Mana |
| Lion Biotechnologies |
Cleanaway Waste and Lion Biotechnologies Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Cleanaway Waste and Lion Biotechnologies
The main advantage of trading using opposite Cleanaway Waste and Lion Biotechnologies positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Cleanaway Waste position performs unexpectedly, Lion Biotechnologies 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 Lion Biotechnologies will offset losses from the drop in Lion Biotechnologies' long position.| Cleanaway Waste vs. THAI BEVERAGE | Cleanaway Waste vs. Seven West Media | Cleanaway Waste vs. Austevoll Seafood ASA | Cleanaway Waste vs. GigaMedia |
| Lion Biotechnologies vs. NIPPON STEEL SPADR | Lion Biotechnologies vs. Cleanaway Waste Management | Lion Biotechnologies vs. Pembina Pipeline Corp | Lion Biotechnologies vs. CosmoSteel Holdings 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 My Watchlist Analysis module to analyze my current watchlist and to refresh optimization strategy. Macroaxis watchlist is based on self-learning algorithm to remember stocks you like.
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