Correlation Between Superior Plus and Clean Harbors

Can any of the company-specific risk be diversified away by investing in both Superior Plus and Clean Harbors 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 Superior Plus and Clean Harbors into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between Superior Plus Corp and Clean Harbors, you can compare the effects of market volatilities on Superior Plus and Clean Harbors 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 Superior Plus with a short position of Clean Harbors. Check out your portfolio center. Please also check ongoing floating volatility patterns of Superior Plus and Clean Harbors.

Diversification Opportunities for Superior Plus and Clean Harbors

-0.59

Correlation Coefficient

Superior Plus  Clean Harbors

Excellent diversification

The 3 months correlation between Superior and Clean is -0.59. Overlapping area represents the amount of risk that can be diversified away by holding Superior Plus Corp and Clean Harbors in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Clean Harbors and Superior Plus 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 Superior Plus Corp are associated (or correlated) with Clean Harbors. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Clean Harbors has no effect on the direction of Superior Plus i.e., Superior Plus and Clean Harbors go up and down completely randomly.

Pair Corralation between Superior Plus and Clean Harbors

Assuming the 90 days horizon Superior Plus Corp is expected to under-perform the Clean Harbors. In addition to that, Superior Plus is 1.61 times more volatile than Clean Harbors. It trades about -0.05 of its total potential returns per unit of risk. Clean Harbors is currently generating about 0.08 per unit of volatility. If you would invest  22,110  in Clean Harbors on August 31, 2024 and sell it today you would earn a total of  2,190  from holding Clean Harbors or generate 9.91% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Very Weak
Accuracy	98.46%
Values	Daily Returns

Superior Plus Corp  vs.  Clean Harbors

Superior Plus Corp

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Superior Plus Corp has generated negative risk-adjusted returns adding no value to investors with long positions. Despite latest fragile performance, the Stock's basic indicators remain stable and the current disturbance on Wall Street may also be a sign of long-run gains for the company stockholders.

Clean Harbors

Risk-Adjusted Performance

6 of 100

Modest

Compared to the overall equity markets, risk-adjusted returns on investments in Clean Harbors are ranked lower than 6 (%) of all global equities and portfolios over the last 90 days. Despite nearly uncertain basic indicators, Clean Harbors may actually be approaching a critical reversion point that can send shares even higher in December 2024.

Pair Trading with Superior Plus and Clean Harbors

The main advantage of trading using opposite Superior Plus and Clean Harbors positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Superior Plus position performs unexpectedly, Clean Harbors 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 Clean Harbors will offset losses from the drop in Clean Harbors' long position.

The idea behind Superior Plus Corp and Clean Harbors pairs trading is to make the combined position market-neutral, meaning the overall market's direction will not affect its win or loss (or potential downside or upside). This can be achieved by designing a pairs trade with two highly correlated stocks or equities that operate in a similar space or sector, making it possible to obtain profits through simple and relatively low-risk investment.

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 Earnings Calls module to check upcoming earnings announcements updated hourly across public exchanges.