Correlation Between Clean Harbors and EcoPlus

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

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

Diversification Opportunities for Clean Harbors and EcoPlus

0.22

Correlation Coefficient

Clean Harbors  EcoPlus

Modest diversification

The 3 months correlation between Clean and EcoPlus is 0.22. Overlapping area represents the amount of risk that can be diversified away by holding Clean Harbors and EcoPlus in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on EcoPlus 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 EcoPlus. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of EcoPlus has no effect on the direction of Clean Harbors i.e., Clean Harbors and EcoPlus go up and down completely randomly.

Pair Corralation between Clean Harbors and EcoPlus

Considering the 90-day investment horizon Clean Harbors is expected to generate 20.82 times less return on investment than EcoPlus. But when comparing it to its historical volatility, Clean Harbors is 19.83 times less risky than EcoPlus. It trades about 0.12 of its potential returns per unit of risk. EcoPlus is currently generating about 0.13 of returns per unit of risk over similar time horizon. If you would invest  0.69  in EcoPlus on May 9, 2025 and sell it today you would earn a total of  0.70  from holding EcoPlus or generate 101.45% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Very Weak
Accuracy	96.83%
Values	Daily Returns

Clean Harbors  vs.  EcoPlus

Clean Harbors

Risk-Adjusted Performance

Fair

Compared to the overall equity markets, risk-adjusted returns on investments in Clean Harbors are ranked lower than 9 (%) 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 September 2025.

EcoPlus

Risk-Adjusted Performance

Fair

Compared to the overall equity markets, risk-adjusted returns on investments in EcoPlus are ranked lower than 9 (%) of all global equities and portfolios over the last 90 days. Despite quite fragile basic indicators, EcoPlus disclosed solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Clean Harbors and EcoPlus

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

The idea behind Clean Harbors and EcoPlus 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 Money Flow Index module to determine momentum by analyzing Money Flow Index and other technical indicators.