Correlation Between Cleanaway Waste and Pro Medicus

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

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

Diversification Opportunities for Cleanaway Waste and Pro Medicus

-0.48

Correlation Coefficient

Cleanaway Waste  Pro Medicus

Very good diversification

The 3 months correlation between Cleanaway and Pro is -0.48. Overlapping area represents the amount of risk that can be diversified away by holding Cleanaway Waste Management and Pro Medicus in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Pro Medicus and Cleanaway 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 Cleanaway Waste Management are associated (or correlated) with Pro Medicus. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Pro Medicus has no effect on the direction of Cleanaway Waste i.e., Cleanaway Waste and Pro Medicus go up and down completely randomly.

Pair Corralation between Cleanaway Waste and Pro Medicus

Assuming the 90 days trading horizon Cleanaway Waste is expected to generate 26.1 times less return on investment than Pro Medicus. But when comparing it to its historical volatility, Cleanaway Waste Management is 1.37 times less risky than Pro Medicus. It trades about 0.01 of its potential returns per unit of risk. Pro Medicus is currently generating about 0.15 of returns per unit of risk over similar time horizon. If you would invest  6,052  in Pro Medicus on October 9, 2024 and sell it today you would earn a total of  19,441  from holding Pro Medicus or generate 321.23% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Very Weak
Accuracy	99.8%
Values	Daily Returns

Cleanaway Waste Management  vs.  Pro Medicus

Cleanaway Waste Mana

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Cleanaway Waste Management has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of latest uncertain performance, the Stock's basic indicators remain stable and the newest uproar on Wall Street may also be a sign of mid-term gains for the firm private investors.

Pro Medicus

Risk-Adjusted Performance

18 of 100

Solid

Compared to the overall equity markets, risk-adjusted returns on investments in Pro Medicus are ranked lower than 18 (%) of all global equities and portfolios over the last 90 days. In spite of comparatively uncertain technical and fundamental indicators, Pro Medicus unveiled solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Cleanaway Waste and Pro Medicus

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

The idea behind Cleanaway Waste Management and Pro Medicus 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 Idea Breakdown module to analyze constituents of all Macroaxis ideas. Macroaxis investment ideas are predefined, sector-focused investing themes.