Correlation Between Waste Management and FLOW TRADERS
Can any of the company-specific risk be diversified away by investing in both Waste Management and FLOW TRADERS 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 Waste Management and FLOW TRADERS into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Waste Management and FLOW TRADERS LTD, you can compare the effects of market volatilities on Waste Management and FLOW TRADERS 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 Waste Management with a short position of FLOW TRADERS. Check out your portfolio center. Please also check ongoing floating volatility patterns of Waste Management and FLOW TRADERS.
Diversification Opportunities for Waste Management and FLOW TRADERS
0.44 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Waste and FLOW is 0.44. Overlapping area represents the amount of risk that can be diversified away by holding Waste Management and FLOW TRADERS LTD in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on FLOW TRADERS LTD and Waste Management 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 Waste Management are associated (or correlated) with FLOW TRADERS. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of FLOW TRADERS LTD has no effect on the direction of Waste Management i.e., Waste Management and FLOW TRADERS go up and down completely randomly.
Pair Corralation between Waste Management and FLOW TRADERS
Assuming the 90 days trading horizon Waste Management is expected to generate 1.42 times less return on investment than FLOW TRADERS. But when comparing it to its historical volatility, Waste Management is 2.62 times less risky than FLOW TRADERS. It trades about 0.3 of its potential returns per unit of risk. FLOW TRADERS LTD is currently generating about 0.16 of returns per unit of risk over similar time horizon. If you would invest 2,352 in FLOW TRADERS LTD on November 28, 2024 and sell it today you would earn a total of 246.00 from holding FLOW TRADERS LTD or generate 10.46% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Waste Management vs. FLOW TRADERS LTD
Performance |
| Timeline |
| Waste Management |
| FLOW TRADERS LTD |
Waste Management and FLOW TRADERS Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Waste Management and FLOW TRADERS
The main advantage of trading using opposite Waste Management and FLOW TRADERS positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Waste Management position performs unexpectedly, FLOW TRADERS 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 FLOW TRADERS will offset losses from the drop in FLOW TRADERS's long position.| Waste Management vs. Diamyd Medical AB | Waste Management vs. Clearside Biomedical | Waste Management vs. Urban Outfitters | Waste Management vs. GRUPO CARSO A1 |
| FLOW TRADERS vs. IMAGIN MEDICAL INC | FLOW TRADERS vs. Merit Medical Systems | FLOW TRADERS vs. Entravision Communications | FLOW TRADERS vs. CompuGroup Medical SE |
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 Stocks Directory module to find actively traded stocks across global markets.
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