Correlation Between Clean Harbors and Decent Holding

Can any of the company-specific risk be diversified away by investing in both Clean Harbors and Decent Holding 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 Clean Harbors and Decent Holding into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between Clean Harbors and Decent Holding Ordinary, you can compare the effects of market volatilities on Clean Harbors and Decent Holding 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 Clean Harbors with a short position of Decent Holding. Check out your portfolio center. Please also check ongoing floating volatility patterns of Clean Harbors and Decent Holding.

Diversification Opportunities for Clean Harbors and Decent Holding

0.21

Correlation Coefficient

Clean Harbors  Decent Holding

Modest diversification

The 3 months correlation between Clean and Decent is 0.21. Overlapping area represents the amount of risk that can be diversified away by holding Clean Harbors and Decent Holding Ordinary in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Decent Holding Ordinary and Clean Harbors 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 Clean Harbors are associated (or correlated) with Decent Holding. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Decent Holding Ordinary has no effect on the direction of Clean Harbors i.e., Clean Harbors and Decent Holding go up and down completely randomly.

Pair Corralation between Clean Harbors and Decent Holding

Considering the 90-day investment horizon Clean Harbors is expected to generate 3.3 times less return on investment than Decent Holding. But when comparing it to its historical volatility, Clean Harbors is 3.6 times less risky than Decent Holding. It trades about 0.08 of its potential returns per unit of risk. Decent Holding Ordinary is currently generating about 0.07 of returns per unit of risk over similar time horizon. If you would invest  121.00  in Decent Holding Ordinary on March 2, 2025 and sell it today you would earn a total of  21.00  from holding Decent Holding Ordinary or generate 17.36% return on investment over 90 days.

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

Clean Harbors  vs.  Decent Holding Ordinary

Clean Harbors

Risk-Adjusted Performance

Modest

Compared to the overall equity markets, risk-adjusted returns on investments in Clean Harbors are ranked lower than 6 (%) of all global equities and portfolios over the last 90 days. Despite fairly unfluctuating essential indicators, Clean Harbors may actually be approaching a critical reversion point that can send shares even higher in July 2025.

Decent Holding Ordinary

Risk-Adjusted Performance

Modest

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

Pair Trading with Clean Harbors and Decent Holding

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

The idea behind Clean Harbors and Decent Holding Ordinary 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 Idea Analyzer module to analyze all characteristics, volatility and risk-adjusted return of Macroaxis ideas.