Correlation Between Waste Management and CEOTRONICS (CEKSG)

Can any of the company-specific risk be diversified away by investing in both Waste Management and CEOTRONICS (CEKSG) 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 Waste Management and CEOTRONICS (CEKSG) into the same portfolio, which is an essential part of the fundamental portfolio management process.

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

Diversification Opportunities for Waste Management and CEOTRONICS (CEKSG)

0.23

Correlation Coefficient

Waste Management  CEOTRONICS (CEKSG)

Modest diversification

The 3 months correlation between Waste and CEOTRONICS is 0.23. Overlapping area represents the amount of risk that can be diversified away by holding Waste Management and CEOTRONICS in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on CEOTRONICS (CEKSG) and Waste Management 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 Waste Management are associated (or correlated) with CEOTRONICS (CEKSG). Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of CEOTRONICS (CEKSG) has no effect on the direction of Waste Management i.e., Waste Management and CEOTRONICS (CEKSG) go up and down completely randomly.

Pair Corralation between Waste Management and CEOTRONICS (CEKSG)

Assuming the 90 days trading horizon Waste Management is expected to generate 1.06 times more return on investment than CEOTRONICS (CEKSG). However, Waste Management is 1.06 times more volatile than CEOTRONICS. It trades about 0.22 of its potential returns per unit of risk. CEOTRONICS is currently generating about 0.11 per unit of risk. If you would invest  19,836  in Waste Management on October 22, 2024 and sell it today you would earn a total of  764.00  from holding Waste Management or generate 3.85% return on investment over 90 days.

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

Waste Management  vs.  CEOTRONICS

Waste Management

Risk-Adjusted Performance

6 of 100

Modest

Compared to the overall equity markets, risk-adjusted returns on investments in Waste Management are ranked lower than 6 (%) of all global equities and portfolios over the last 90 days. In spite of comparatively stable basic indicators, Waste Management is not utilizing all of its potentials. The current stock price uproar, may contribute to short-horizon losses for the private investors.

CEOTRONICS (CEKSG)

Risk-Adjusted Performance

5 of 100

Modest

Compared to the overall equity markets, risk-adjusted returns on investments in CEOTRONICS are ranked lower than 5 (%) of all global equities and portfolios over the last 90 days. In spite of comparatively weak basic indicators, CEOTRONICS (CEKSG) unveiled solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Waste Management and CEOTRONICS (CEKSG)

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

The idea behind Waste Management and CEOTRONICS 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.

Check out your portfolio center.

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 Funds Screener module to find actively-traded funds from around the world traded on over 30 global exchanges.