Correlation Between Cleanaway Waste and Nine Dragons
Can any of the company-specific risk be diversified away by investing in both Cleanaway Waste and Nine Dragons 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 Nine Dragons 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 Nine Dragons Paper, you can compare the effects of market volatilities on Cleanaway Waste and Nine Dragons 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 Nine Dragons. Check out your portfolio center. Please also check ongoing floating volatility patterns of Cleanaway Waste and Nine Dragons.
Diversification Opportunities for Cleanaway Waste and Nine Dragons
0.5 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Cleanaway and Nine is 0.5. Overlapping area represents the amount of risk that can be diversified away by holding Cleanaway Waste Management and Nine Dragons Paper in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Nine Dragons Paper 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 Nine Dragons. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Nine Dragons Paper has no effect on the direction of Cleanaway Waste i.e., Cleanaway Waste and Nine Dragons go up and down completely randomly.
Pair Corralation between Cleanaway Waste and Nine Dragons
Assuming the 90 days trading horizon Cleanaway Waste Management is expected to generate 0.36 times more return on investment than Nine Dragons. However, Cleanaway Waste Management is 2.79 times less risky than Nine Dragons. It trades about 0.04 of its potential returns per unit of risk. Nine Dragons Paper is currently generating about 0.01 per unit of risk. If you would invest 148.00 in Cleanaway Waste Management on August 29, 2024 and sell it today you would earn a total of 29.00 from holding Cleanaway Waste Management or generate 19.59% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Cleanaway Waste Management vs. Nine Dragons Paper
Performance |
| Timeline |
| Cleanaway Waste Mana |
| Nine Dragons Paper |
Cleanaway Waste and Nine Dragons Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Cleanaway Waste and Nine Dragons
The main advantage of trading using opposite Cleanaway Waste and Nine Dragons positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Cleanaway Waste position performs unexpectedly, Nine Dragons 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 Nine Dragons will offset losses from the drop in Nine Dragons' long position.| Cleanaway Waste vs. Apple Inc | Cleanaway Waste vs. Apple Inc | Cleanaway Waste vs. Apple Inc | Cleanaway Waste vs. Apple Inc |
| Nine Dragons vs. CapitaLand Investment Limited | Nine Dragons vs. REINET INVESTMENTS SCA | Nine Dragons vs. HK Electric Investments | Nine Dragons vs. SLR Investment Corp |
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 Portfolio File Import module to quickly import all of your third-party portfolios from your local drive in csv format.
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