Correlation Between Waste Management and YXTCOM GROUP

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

By analyzing existing cross correlation between Waste Management and YXTCOM GROUP HOLDING, you can compare the effects of market volatilities on Waste Management and YXTCOM GROUP 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 YXTCOM GROUP. Check out your portfolio center. Please also check ongoing floating volatility patterns of Waste Management and YXTCOM GROUP.

Diversification Opportunities for Waste Management and YXTCOM GROUP

-0.37

Correlation Coefficient

Waste Management  YXTCOM GROUP

Very good diversification

The 3 months correlation between Waste and YXTCOM is -0.37. Overlapping area represents the amount of risk that can be diversified away by holding Waste Management and YXTCOM GROUP HOLDING in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on YXTCOM GROUP HOLDING 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 YXTCOM GROUP. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of YXTCOM GROUP HOLDING has no effect on the direction of Waste Management i.e., Waste Management and YXTCOM GROUP go up and down completely randomly.

Pair Corralation between Waste Management and YXTCOM GROUP

Allowing for the 90-day total investment horizon Waste Management is expected to generate 0.12 times more return on investment than YXTCOM GROUP. However, Waste Management is 8.36 times less risky than YXTCOM GROUP. It trades about 0.06 of its potential returns per unit of risk. YXTCOM GROUP HOLDING is currently generating about -0.12 per unit of risk. If you would invest  14,905  in Waste Management on September 26, 2024 and sell it today you would earn a total of  5,475  from holding Waste Management or generate 36.73% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Insignificant
Accuracy	18.35%
Values	Daily Returns

Waste Management  vs.  YXTCOM GROUP HOLDING

Waste Management

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Waste Management has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of very healthy primary indicators, Waste Management is not utilizing all of its potentials. The current stock price disarray, may contribute to short-term losses for the investors.

YXTCOM GROUP HOLDING

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days YXTCOM GROUP HOLDING has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of inconsistent performance in the last few months, the Stock's basic indicators remain comparatively stable which may send shares a bit higher in January 2025. The newest uproar may also be a sign of mid-term up-swing for the firm private investors.

Pair Trading with Waste Management and YXTCOM GROUP

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

The idea behind Waste Management and YXTCOM GROUP HOLDING 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 Equity Valuation module to check real value of public entities based on technical and fundamental data.