Correlation Between Clean Harbors and Stericycle

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

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

Diversification Opportunities for Clean Harbors and Stericycle

0.0

Correlation Coefficient

Clean Harbors  Stericycle

Pay attention - limited upside

The 3 months correlation between Clean and Stericycle is 0.0. Overlapping area represents the amount of risk that can be diversified away by holding Clean Harbors and Stericycle in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Stericycle 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 Stericycle. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Stericycle has no effect on the direction of Clean Harbors i.e., Clean Harbors and Stericycle go up and down completely randomly.

Pair Corralation between Clean Harbors and Stericycle

If you would invest  13,207  in Clean Harbors on November 19, 2024 and sell it today you would earn a total of  9,771  from holding Clean Harbors or generate 73.98% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Flat
Strength	Insignificant
Accuracy	0.0%
Values	Daily Returns

Clean Harbors  vs.  Stericycle

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 latest unfluctuating performance, the Stock's essential indicators remain strong and the recent confusion on Wall Street may also be a sign of long-lasting gains for the firm traders.

Stericycle

Risk-Adjusted Performance

Very Weak

Over the last 90 days Stericycle has generated negative risk-adjusted returns adding no value to investors with long positions. Despite quite persistent fundamental indicators, Stericycle is not utilizing all of its potentials. The recent stock price mess, may contribute to short-term losses for the institutional investors.

Pair Trading with Clean Harbors and Stericycle

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

The idea behind Clean Harbors and Stericycle 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 Efficient Frontier module to plot and analyze your portfolio and positions against risk-return landscape of the market..