Correlation Between Cielo Waste and Laurentian Bank

Can any of the company-specific risk be diversified away by investing in both Cielo Waste and Laurentian Bank 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 Laurentian Bank 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 Laurentian Bank, you can compare the effects of market volatilities on Cielo Waste and Laurentian Bank 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 Laurentian Bank. Check out your portfolio center. Please also check ongoing floating volatility patterns of Cielo Waste and Laurentian Bank.

Diversification Opportunities for Cielo Waste and Laurentian Bank

-0.89

Correlation Coefficient

Cielo Waste  Laurentian Bank

Pay attention - limited upside

The 3 months correlation between Cielo and Laurentian is -0.89. Overlapping area represents the amount of risk that can be diversified away by holding Cielo Waste Solutions and Laurentian Bank in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Laurentian Bank 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 Laurentian Bank. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Laurentian Bank has no effect on the direction of Cielo Waste i.e., Cielo Waste and Laurentian Bank go up and down completely randomly.

Pair Corralation between Cielo Waste and Laurentian Bank

Assuming the 90 days horizon Cielo Waste Solutions is expected to generate 4.06 times more return on investment than Laurentian Bank. However, Cielo Waste is 4.06 times more volatile than Laurentian Bank. It trades about 0.09 of its potential returns per unit of risk. Laurentian Bank is currently generating about 0.19 per unit of risk. If you would invest  9.50  in Cielo Waste Solutions on October 22, 2024 and sell it today you would earn a total of  0.50  from holding Cielo Waste Solutions or generate 5.26% return on investment over 90 days.

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

Cielo Waste Solutions  vs.  Laurentian Bank

Cielo Waste Solutions

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Cielo Waste Solutions has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of unfluctuating performance in the last few months, the Stock's basic indicators remain fairly stable which may send shares a bit higher in February 2025. The latest fuss may also be a sign of long-term up-swing for the venture sophisticated investors.

Laurentian Bank

Risk-Adjusted Performance

9 of 100

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Laurentian Bank are ranked lower than 9 (%) of all global equities and portfolios over the last 90 days. In spite of very unfluctuating basic indicators, Laurentian Bank may actually be approaching a critical reversion point that can send shares even higher in February 2025.

Pair Trading with Cielo Waste and Laurentian Bank

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

The idea behind Cielo Waste Solutions and Laurentian Bank 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 Earnings Calls module to check upcoming earnings announcements updated hourly across public exchanges.