Correlation Between Clean Harbors and Secure Energy

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

By analyzing existing cross correlation between Clean Harbors and Secure Energy Services, you can compare the effects of market volatilities on Clean Harbors and Secure Energy 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 Secure Energy. Check out your portfolio center. Please also check ongoing floating volatility patterns of Clean Harbors and Secure Energy.

Diversification Opportunities for Clean Harbors and Secure Energy

0.53

Correlation Coefficient

Clean Harbors  Secure Energy

Very weak diversification

The 3 months correlation between Clean and Secure is 0.53. Overlapping area represents the amount of risk that can be diversified away by holding Clean Harbors and Secure Energy Services in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Secure Energy Services 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 Secure Energy. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Secure Energy Services has no effect on the direction of Clean Harbors i.e., Clean Harbors and Secure Energy go up and down completely randomly.

Pair Corralation between Clean Harbors and Secure Energy

Considering the 90-day investment horizon Clean Harbors is expected to under-perform the Secure Energy. But the stock apears to be less risky and, when comparing its historical volatility, Clean Harbors is 1.13 times less risky than Secure Energy. The stock trades about -0.14 of its potential returns per unit of risk. The Secure Energy Services is currently generating about 0.01 of returns per unit of risk over similar time horizon. If you would invest  1,098  in Secure Energy Services on December 27, 2024 and sell it today you would earn a total of  7.00  from holding Secure Energy Services or generate 0.64% return on investment over 90 days.

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

Clean Harbors  vs.  Secure Energy Services

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 unfluctuating performance in the last few months, the Stock's essential indicators remain fairly strong which may send shares a bit higher in April 2025. The recent confusion may also be a sign of long-lasting up-swing for the firm traders.

Secure Energy Services

Risk-Adjusted Performance

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in Secure Energy Services are ranked lower than 1 (%) of all global equities and portfolios over the last 90 days. Despite nearly stable basic indicators, Secure Energy is not utilizing all of its potentials. The newest stock price disturbance, may contribute to mid-run losses for the stockholders.

Pair Trading with Clean Harbors and Secure Energy

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

The idea behind Clean Harbors and Secure Energy Services 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 Sectors module to list of equity sectors categorizing publicly traded companies based on their primary business activities.