Correlation Between EcoPlus and Cielo Waste

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

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

Diversification Opportunities for EcoPlus and Cielo Waste

0.0

Correlation Coefficient

EcoPlus  Cielo Waste

Pay attention - limited upside

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

Pair Corralation between EcoPlus and Cielo Waste

Given the investment horizon of 90 days EcoPlus is expected to generate 5.83 times less return on investment than Cielo Waste. But when comparing it to its historical volatility, EcoPlus is 3.32 times less risky than Cielo Waste. It trades about 0.08 of its potential returns per unit of risk. Cielo Waste Solutions is currently generating about 0.14 of returns per unit of risk over similar time horizon. If you would invest  4.00  in Cielo Waste Solutions on May 3, 2025 and sell it today you would lose (0.83) from holding Cielo Waste Solutions or give up 20.75% of portfolio value over 90 days.

Time Period	3 Months [change]
Direction	Flat
Strength	Insignificant
Accuracy	96.83%
Values	Daily Returns

EcoPlus  vs.  Cielo Waste Solutions

EcoPlus

Risk-Adjusted Performance

Modest

Compared to the overall equity markets, risk-adjusted returns on investments in EcoPlus are ranked lower than 6 (%) 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.

Cielo Waste Solutions

Risk-Adjusted Performance

Good

Compared to the overall equity markets, risk-adjusted returns on investments in Cielo Waste Solutions are ranked lower than 11 (%) of all global equities and portfolios over the last 90 days. Despite nearly uncertain technical and fundamental indicators, Cielo Waste reported solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with EcoPlus and Cielo Waste

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

The idea behind EcoPlus and Cielo Waste 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 ETFs module to find actively traded Exchange Traded Funds (ETF) from around the world.