Correlation Between Cielo Waste and Spectral Med

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

By analyzing existing cross correlation between Cielo Waste Solutions and Spectral Med, you can compare the effects of market volatilities on Cielo Waste and Spectral Med 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 Cielo Waste with a short position of Spectral Med. Check out your portfolio center. Please also check ongoing floating volatility patterns of Cielo Waste and Spectral Med.

Diversification Opportunities for Cielo Waste and Spectral Med

-0.57

Correlation Coefficient

Cielo Waste  Spectral Med

Excellent diversification

The 3 months correlation between Cielo and Spectral is -0.57. Overlapping area represents the amount of risk that can be diversified away by holding Cielo Waste Solutions and Spectral Med in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Spectral Med and Cielo Waste 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 Cielo Waste Solutions are associated (or correlated) with Spectral Med. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Spectral Med has no effect on the direction of Cielo Waste i.e., Cielo Waste and Spectral Med go up and down completely randomly.

Pair Corralation between Cielo Waste and Spectral Med

Assuming the 90 days horizon Cielo Waste is expected to generate 6.72 times less return on investment than Spectral Med. In addition to that, Cielo Waste is 1.13 times more volatile than Spectral Med. It trades about 0.02 of its total potential returns per unit of risk. Spectral Med is currently generating about 0.17 per unit of volatility. If you would invest  49.00  in Spectral Med on December 22, 2024 and sell it today you would earn a total of  22.00  from holding Spectral Med or generate 44.9% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Very Weak
Accuracy	98.39%
Values	Daily Returns

Cielo Waste Solutions  vs.  Spectral Med

Cielo Waste Solutions

Risk-Adjusted Performance

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in Cielo Waste Solutions are ranked lower than 1 (%) of all global equities and portfolios over the last 90 days. In spite of fairly unfluctuating basic indicators, Cielo Waste may actually be approaching a critical reversion point that can send shares even higher in April 2025.

Spectral Med

Risk-Adjusted Performance

Good

Compared to the overall equity markets, risk-adjusted returns on investments in Spectral Med are ranked lower than 13 (%) of all global equities and portfolios over the last 90 days. In spite of very unfluctuating basic indicators, Spectral Med displayed solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Cielo Waste and Spectral Med

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

The idea behind Cielo Waste Solutions and Spectral Med 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 Price Exposure Probability module to analyze equity upside and downside potential for a given time horizon across multiple markets.