Correlation Between Waste Management and Lupatech
Can any of the company-specific risk be diversified away by investing in both Waste Management and Lupatech 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 Lupatech into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Waste Management and Lupatech SA, you can compare the effects of market volatilities on Waste Management and Lupatech 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 Lupatech. Check out your portfolio center. Please also check ongoing floating volatility patterns of Waste Management and Lupatech.
Diversification Opportunities for Waste Management and Lupatech
-0.54 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Waste and Lupatech is -0.54. Overlapping area represents the amount of risk that can be diversified away by holding Waste Management and Lupatech SA in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Lupatech SA 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 Lupatech. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Lupatech SA has no effect on the direction of Waste Management i.e., Waste Management and Lupatech go up and down completely randomly.
Pair Corralation between Waste Management and Lupatech
Assuming the 90 days trading horizon Waste Management is expected to under-perform the Lupatech. But the stock apears to be less risky and, when comparing its historical volatility, Waste Management is 2.04 times less risky than Lupatech. The stock trades about -0.05 of its potential returns per unit of risk. The Lupatech SA is currently generating about 0.0 of returns per unit of risk over similar time horizon. If you would invest 131.00 in Lupatech SA on September 14, 2024 and sell it today you would lose (1.00) from holding Lupatech SA or give up 0.76% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Waste Management vs. Lupatech SA
Performance |
| Timeline |
| Waste Management |
| Lupatech SA |
Waste Management and Lupatech Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Waste Management and Lupatech
The main advantage of trading using opposite Waste Management and Lupatech positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Waste Management position performs unexpectedly, Lupatech 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 Lupatech will offset losses from the drop in Lupatech's long position.| Waste Management vs. Ambipar Participaes e | Waste Management vs. Fundo Investimento Imobiliario | Waste Management vs. LESTE FDO INV | Waste Management vs. Fras le SA |
| Lupatech vs. PDG Realty SA | Lupatech vs. Positivo Tecnologia SA | Lupatech vs. Rossi Residencial SA | Lupatech vs. Gafisa SA |
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 Theme Ratings module to determine theme ratings based on digital equity recommendations. Macroaxis theme ratings are based on combination of fundamental analysis and risk-adjusted market performance.
Other Complementary Tools
| Idea Breakdown Analyze constituents of all Macroaxis ideas. Macroaxis investment ideas are predefined, sector-focused investing themes | |
| Stock Tickers Use high-impact, comprehensive, and customizable stock tickers that can be easily integrated to any websites | |
| Price Ceiling Movement Calculate and plot Price Ceiling Movement for different equity instruments | |
| Portfolio Holdings Check your current holdings and cash postion to detemine if your portfolio needs rebalancing | |
| Fundamentals Comparison Compare fundamentals across multiple equities to find investing opportunities |