Correlation Between BQE Water and Charah Solutions

Can any of the company-specific risk be diversified away by investing in both BQE Water and Charah Solutions 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 BQE Water and Charah Solutions into the same portfolio, which is an essential part of the fundamental portfolio management process.

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

Diversification Opportunities for BQE Water and Charah Solutions

0.0

Correlation Coefficient

BQE Water  Charah Solutions

Pay attention - limited upside

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

Pair Corralation between BQE Water and Charah Solutions

If you would invest (100.00) in Charah Solutions on January 10, 2025 and sell it today you would earn a total of  100.00  from holding Charah Solutions or generate -100.0% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Flat
Strength	Insignificant
Accuracy	0.0%
Values	Daily Returns

BQE Water  vs.  Charah Solutions

BQE Water

Risk-Adjusted Performance

Very Weak

Over the last 90 days BQE Water has generated negative risk-adjusted returns adding no value to investors with long positions. Despite fragile performance in the last few months, the Stock's basic indicators remain nearly stable which may send shares a bit higher in May 2025. The current disturbance may also be a sign of long-run up-swing for the company stockholders.

Charah Solutions

Risk-Adjusted Performance

Very Weak

Over the last 90 days Charah Solutions has generated negative risk-adjusted returns adding no value to investors with long positions. Despite somewhat strong basic indicators, Charah Solutions is not utilizing all of its potentials. The current stock price disturbance, may contribute to short-term losses for the investors.

Pair Trading with BQE Water and Charah Solutions

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

The idea behind BQE Water and Charah Solutions 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 Price Exposure Probability module to analyze equity upside and downside potential for a given time horizon across multiple markets.