Correlation Between Clean Harbors and MITSUBISHI KAKOKI

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

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

Diversification Opportunities for Clean Harbors and MITSUBISHI KAKOKI

-0.77

Correlation Coefficient

Clean Harbors  MITSUBISHI KAKOKI

Pay attention - limited upside

The 3 months correlation between Clean and MITSUBISHI is -0.77. Overlapping area represents the amount of risk that can be diversified away by holding Clean Harbors and MITSUBISHI KAKOKI in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on MITSUBISHI KAKOKI and Clean Harbors 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 Clean Harbors are associated (or correlated) with MITSUBISHI KAKOKI. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of MITSUBISHI KAKOKI has no effect on the direction of Clean Harbors i.e., Clean Harbors and MITSUBISHI KAKOKI go up and down completely randomly.

Pair Corralation between Clean Harbors and MITSUBISHI KAKOKI

Assuming the 90 days horizon Clean Harbors is expected to under-perform the MITSUBISHI KAKOKI. But the stock apears to be less risky and, when comparing its historical volatility, Clean Harbors is 1.02 times less risky than MITSUBISHI KAKOKI. The stock trades about -0.16 of its potential returns per unit of risk. The MITSUBISHI KAKOKI is currently generating about 0.1 of returns per unit of risk over similar time horizon. If you would invest  742.00  in MITSUBISHI KAKOKI on December 30, 2024 and sell it today you would earn a total of  73.00  from holding MITSUBISHI KAKOKI or generate 9.84% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Weak
Accuracy	100.0%
Values	Daily Returns

Clean Harbors  vs.  MITSUBISHI KAKOKI

Clean Harbors

Risk-Adjusted Performance

Very Weak

Over the last 90 days Clean Harbors has generated negative risk-adjusted returns adding no value to investors with long positions. Despite fragile performance in the last few months, the Stock's basic indicators remain nearly stable which may send shares a bit higher in April 2025. The current disturbance may also be a sign of long-run up-swing for the company stockholders.

MITSUBISHI KAKOKI

Risk-Adjusted Performance

OK

Compared to the overall equity markets, risk-adjusted returns on investments in MITSUBISHI KAKOKI are ranked lower than 7 (%) of all global equities and portfolios over the last 90 days. Despite nearly fragile basic indicators, MITSUBISHI KAKOKI may actually be approaching a critical reversion point that can send shares even higher in April 2025.

Pair Trading with Clean Harbors and MITSUBISHI KAKOKI

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

The idea behind Clean Harbors and MITSUBISHI KAKOKI 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.

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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 Top Crypto Exchanges module to search and analyze digital assets across top global cryptocurrency exchanges.