Correlation Between Waste Plastic and Circa Group
Can any of the company-specific risk be diversified away by investing in both Waste Plastic and Circa Group 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 Plastic and Circa Group into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Waste Plastic Upcycling and Circa Group AS, you can compare the effects of market volatilities on Waste Plastic and Circa Group 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 Plastic with a short position of Circa Group. Check out your portfolio center. Please also check ongoing floating volatility patterns of Waste Plastic and Circa Group.
Diversification Opportunities for Waste Plastic and Circa Group
-0.58 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Waste and Circa is -0.58. Overlapping area represents the amount of risk that can be diversified away by holding Waste Plastic Upcycling and Circa Group AS in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Circa Group AS and Waste Plastic 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 Plastic Upcycling are associated (or correlated) with Circa Group. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Circa Group AS has no effect on the direction of Waste Plastic i.e., Waste Plastic and Circa Group go up and down completely randomly.
Pair Corralation between Waste Plastic and Circa Group
Assuming the 90 days trading horizon Waste Plastic Upcycling is expected to under-perform the Circa Group. But the stock apears to be less risky and, when comparing its historical volatility, Waste Plastic Upcycling is 2.43 times less risky than Circa Group. The stock trades about -0.09 of its potential returns per unit of risk. The Circa Group AS is currently generating about -0.04 of returns per unit of risk over similar time horizon. If you would invest 348.00 in Circa Group AS on September 4, 2024 and sell it today you would lose (284.00) from holding Circa Group AS or give up 81.61% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Waste Plastic Upcycling vs. Circa Group AS
Performance |
| Timeline |
| Waste Plastic Upcycling |
| Circa Group AS |
Waste Plastic and Circa Group Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Waste Plastic and Circa Group
The main advantage of trading using opposite Waste Plastic and Circa Group positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Waste Plastic position performs unexpectedly, Circa Group 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 Circa Group will offset losses from the drop in Circa Group's long position.| Waste Plastic vs. Tomra Systems ASA | Waste Plastic vs. Cambi ASA | Waste Plastic vs. Vow Green Metals | Waste Plastic vs. Pryme BV |
| Circa Group vs. Sogn Sparebank | Circa Group vs. Nordic Mining ASA | Circa Group vs. Lea Bank ASA | Circa Group vs. Helgeland Sparebank |
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 Idea Breakdown module to analyze constituents of all Macroaxis ideas. Macroaxis investment ideas are predefined, sector-focused investing themes.
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