Correlation Between Cleanaway Waste and Yancoal Australia

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

Diversification Opportunities for Cleanaway Waste and Yancoal Australia

-0.32

Correlation Coefficient

Cleanaway Waste  Yancoal Australia

Very good diversification

The 3 months correlation between Cleanaway and Yancoal is -0.32. Overlapping area represents the amount of risk that can be diversified away by holding Cleanaway Waste Management and Yancoal Australia in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Yancoal Australia 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 Yancoal Australia. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Yancoal Australia has no effect on the direction of Cleanaway Waste i.e., Cleanaway Waste and Yancoal Australia go up and down completely randomly.

Pair Corralation between Cleanaway Waste and Yancoal Australia

Assuming the 90 days trading horizon Cleanaway Waste Management is expected to under-perform the Yancoal Australia. But the stock apears to be less risky and, when comparing its historical volatility, Cleanaway Waste Management is 1.31 times less risky than Yancoal Australia. The stock trades about -0.22 of its potential returns per unit of risk. The Yancoal Australia is currently generating about -0.13 of returns per unit of risk over similar time horizon. If you would invest  625.00  in Yancoal Australia on October 11, 2024 and sell it today you would lose (23.00) from holding Yancoal Australia or give up 3.68% of portfolio value over 90 days.

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

Cleanaway Waste Management  vs.  Yancoal Australia

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.

Yancoal Australia

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Yancoal Australia has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of comparatively stable essential indicators, Yancoal Australia is not utilizing all of its potentials. The newest stock price uproar, may contribute to short-horizon losses for the private investors.

Pair Trading with Cleanaway Waste and Yancoal Australia

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

The idea behind Cleanaway Waste Management and Yancoal Australia 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 CEOs Directory module to screen CEOs from public companies around the world.