Correlation Between Cleanaway Waste and Summit Hotel
Can any of the company-specific risk be diversified away by investing in both Cleanaway Waste and Summit Hotel 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 Summit Hotel 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 Summit Hotel Properties, you can compare the effects of market volatilities on Cleanaway Waste and Summit Hotel 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 Summit Hotel. Check out your portfolio center. Please also check ongoing floating volatility patterns of Cleanaway Waste and Summit Hotel.
Diversification Opportunities for Cleanaway Waste and Summit Hotel
-0.56 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Cleanaway and Summit is -0.56. Overlapping area represents the amount of risk that can be diversified away by holding Cleanaway Waste Management and Summit Hotel Properties in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Summit Hotel Properties 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 Summit Hotel. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Summit Hotel Properties has no effect on the direction of Cleanaway Waste i.e., Cleanaway Waste and Summit Hotel go up and down completely randomly.
Pair Corralation between Cleanaway Waste and Summit Hotel
Assuming the 90 days trading horizon Cleanaway Waste Management is expected to generate 0.98 times more return on investment than Summit Hotel. However, Cleanaway Waste Management is 1.02 times less risky than Summit Hotel. It trades about 0.01 of its potential returns per unit of risk. Summit Hotel Properties is currently generating about 0.0 per unit of risk. If you would invest 151.00 in Cleanaway Waste Management on November 27, 2024 and sell it today you would earn a total of 5.00 from holding Cleanaway Waste Management or generate 3.31% 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. Summit Hotel Properties
Performance |
| Timeline |
| Cleanaway Waste Mana |
| Summit Hotel Properties |
Cleanaway Waste and Summit Hotel Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Cleanaway Waste and Summit Hotel
The main advantage of trading using opposite Cleanaway Waste and Summit Hotel positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Cleanaway Waste position performs unexpectedly, Summit Hotel 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 Summit Hotel will offset losses from the drop in Summit Hotel's long position.| Cleanaway Waste vs. China Telecom | Cleanaway Waste vs. CITIC Telecom International | Cleanaway Waste vs. SOUTHWEST AIRLINES | Cleanaway Waste vs. COMBA TELECOM SYST |
| Summit Hotel vs. Hua Hong Semiconductor | Summit Hotel vs. Elmos Semiconductor SE | Summit Hotel vs. SmarTone Telecommunications Holdings | Summit Hotel vs. Semiconductor Manufacturing International |
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 Pair Correlation module to compare performance and examine fundamental relationship between any two equity instruments.
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