Correlation Between Cleanaway Waste and Sandfire Resources

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

Diversification Opportunities for Cleanaway Waste and Sandfire Resources

0.0

Correlation Coefficient

Cleanaway Waste  Sandfire Resources

Pay attention - limited upside

The 3 months correlation between Cleanaway and Sandfire is 0.0. Overlapping area represents the amount of risk that can be diversified away by holding Cleanaway Waste Management and Sandfire Resources Limited in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Sandfire Resources 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 Sandfire Resources. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Sandfire Resources has no effect on the direction of Cleanaway Waste i.e., Cleanaway Waste and Sandfire Resources go up and down completely randomly.

Pair Corralation between Cleanaway Waste and Sandfire Resources

If you would invest  0.00  in Sandfire Resources Limited on October 10, 2024 and sell it today you would earn a total of  0.00  from holding Sandfire Resources Limited or generate 0.0% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Flat
Strength	Insignificant
Accuracy	5.56%
Values	Daily Returns

Cleanaway Waste Management  vs.  Sandfire Resources Limited

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 fragile 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.

Sandfire Resources

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Sandfire Resources Limited has generated negative risk-adjusted returns adding no value to investors with long positions. Despite nearly stable basic indicators, Sandfire Resources is not utilizing all of its potentials. The current stock price disturbance, may contribute to mid-run losses for the stockholders.

Pair Trading with Cleanaway Waste and Sandfire Resources

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

The idea behind Cleanaway Waste Management and Sandfire Resources Limited 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 Bond Analysis module to evaluate and analyze corporate bonds as a potential investment for your portfolios..