Correlation Between Cleanaway Waste and Xcel Energy
Can any of the company-specific risk be diversified away by investing in both Cleanaway Waste and Xcel Energy 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 Xcel Energy 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 Xcel Energy, you can compare the effects of market volatilities on Cleanaway Waste and Xcel Energy 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 Xcel Energy. Check out your portfolio center. Please also check ongoing floating volatility patterns of Cleanaway Waste and Xcel Energy.
Diversification Opportunities for Cleanaway Waste and Xcel Energy
0.14 | Correlation Coefficient |
Average diversification
The 3 months correlation between Cleanaway and Xcel is 0.14. Overlapping area represents the amount of risk that can be diversified away by holding Cleanaway Waste Management and Xcel Energy in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Xcel Energy 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 Xcel Energy. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Xcel Energy has no effect on the direction of Cleanaway Waste i.e., Cleanaway Waste and Xcel Energy go up and down completely randomly.
Pair Corralation between Cleanaway Waste and Xcel Energy
Assuming the 90 days trading horizon Cleanaway Waste is expected to generate 1.11 times less return on investment than Xcel Energy. In addition to that, Cleanaway Waste is 1.16 times more volatile than Xcel Energy. It trades about 0.05 of its total potential returns per unit of risk. Xcel Energy is currently generating about 0.07 per unit of volatility. If you would invest 5,405 in Xcel Energy on August 31, 2024 and sell it today you would earn a total of 1,460 from holding Xcel Energy or generate 27.01% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Cleanaway Waste Management vs. Xcel Energy
Performance |
| Timeline |
| Cleanaway Waste Mana |
| Xcel Energy |
Cleanaway Waste and Xcel Energy Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Cleanaway Waste and Xcel Energy
The main advantage of trading using opposite Cleanaway Waste and Xcel Energy positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Cleanaway Waste position performs unexpectedly, Xcel Energy 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 Xcel Energy will offset losses from the drop in Xcel Energy's long position.| Cleanaway Waste vs. Apple Inc | Cleanaway Waste vs. Apple Inc | Cleanaway Waste vs. Apple Inc | Cleanaway Waste vs. Apple Inc |
| Xcel Energy vs. Hyrican Informationssysteme Aktiengesellschaft | Xcel Energy vs. Cleanaway Waste Management | Xcel Energy vs. Public Storage | Xcel Energy vs. Ramsay Health Care |
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 Efficient Frontier module to plot and analyze your portfolio and positions against risk-return landscape of the market..
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