Correlation Between Greenwave Technology and Republic Services

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

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

Diversification Opportunities for Greenwave Technology and Republic Services

0.17

Correlation Coefficient

Greenwave Technology  Republic Services

Average diversification

The 3 months correlation between Greenwave and Republic is 0.17. Overlapping area represents the amount of risk that can be diversified away by holding Greenwave Technology Solutions and Republic Services in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Republic Services and Greenwave Technology 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 Greenwave Technology Solutions are associated (or correlated) with Republic Services. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Republic Services has no effect on the direction of Greenwave Technology i.e., Greenwave Technology and Republic Services go up and down completely randomly.

Pair Corralation between Greenwave Technology and Republic Services

Given the investment horizon of 90 days Greenwave Technology Solutions is expected to generate 11.35 times more return on investment than Republic Services. However, Greenwave Technology is 11.35 times more volatile than Republic Services. It trades about 0.12 of its potential returns per unit of risk. Republic Services is currently generating about 0.06 per unit of risk. If you would invest  42.00  in Greenwave Technology Solutions on September 12, 2024 and sell it today you would earn a total of  31.00  from holding Greenwave Technology Solutions or generate 73.81% return on investment over 90 days.

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

Greenwave Technology Solutions  vs.  Republic Services

Greenwave Technology

Risk-Adjusted Performance

9 of 100

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Greenwave Technology Solutions are ranked lower than 9 (%) of all global equities and portfolios over the last 90 days. In spite of fairly fragile basic indicators, Greenwave Technology showed solid returns over the last few months and may actually be approaching a breakup point.

Republic Services

Risk-Adjusted Performance

4 of 100

Insignificant

Compared to the overall equity markets, risk-adjusted returns on investments in Republic Services are ranked lower than 4 (%) of all global equities and portfolios over the last 90 days. Despite nearly stable basic indicators, Republic Services is not utilizing all of its potentials. The newest stock price disturbance, may contribute to mid-run losses for the stockholders.

Pair Trading with Greenwave Technology and Republic Services

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

The idea behind Greenwave Technology Solutions and Republic Services 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 Volatility Analysis module to get historical volatility and risk analysis based on latest market data.