Correlation Between Cleanaway Waste and Deutsche Post

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

Diversification Opportunities for Cleanaway Waste and Deutsche Post

-0.65

Correlation Coefficient

Cleanaway Waste  Deutsche Post

Excellent diversification

The 3 months correlation between Cleanaway and Deutsche is -0.65. Overlapping area represents the amount of risk that can be diversified away by holding Cleanaway Waste Management and Deutsche Post AG in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Deutsche Post AG 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 Deutsche Post. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Deutsche Post AG has no effect on the direction of Cleanaway Waste i.e., Cleanaway Waste and Deutsche Post go up and down completely randomly.

Pair Corralation between Cleanaway Waste and Deutsche Post

Assuming the 90 days trading horizon Cleanaway Waste is expected to generate 49.18 times less return on investment than Deutsche Post. In addition to that, Cleanaway Waste is 1.12 times more volatile than Deutsche Post AG. It trades about 0.0 of its total potential returns per unit of risk. Deutsche Post AG is currently generating about 0.16 per unit of volatility. If you would invest  3,369  in Deutsche Post AG on December 25, 2024 and sell it today you would earn a total of  754.00  from holding Deutsche Post AG or generate 22.38% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Weak
Accuracy	98.36%
Values	Daily Returns

Cleanaway Waste Management  vs.  Deutsche Post AG

Cleanaway Waste Mana

Risk-Adjusted Performance

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 comparatively stable basic indicators, Cleanaway Waste is not utilizing all of its potentials. The latest stock price uproar, may contribute to short-horizon losses for the private investors.

Deutsche Post AG

Risk-Adjusted Performance

Good

Compared to the overall equity markets, risk-adjusted returns on investments in Deutsche Post AG are ranked lower than 12 (%) of all global equities and portfolios over the last 90 days. Despite somewhat fragile essential indicators, Deutsche Post sustained solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Cleanaway Waste and Deutsche Post

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

The idea behind Cleanaway Waste Management and Deutsche Post AG 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 Portfolio Analyzer module to portfolio analysis module that provides access to portfolio diagnostics and optimization engine.