Correlation Between Gap, and Cleanaway Waste

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

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

Diversification Opportunities for Gap, and Cleanaway Waste

-0.37

Correlation Coefficient

Gap,  Cleanaway Waste

Very good diversification

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

Pair Corralation between Gap, and Cleanaway Waste

Considering the 90-day investment horizon The Gap, is expected to under-perform the Cleanaway Waste. But the stock apears to be less risky and, when comparing its historical volatility, The Gap, is 1.61 times less risky than Cleanaway Waste. The stock trades about -0.06 of its potential returns per unit of risk. The Cleanaway Waste Management is currently generating about 0.15 of returns per unit of risk over similar time horizon. If you would invest  172.00  in Cleanaway Waste Management on July 26, 2024 and sell it today you would earn a total of  40.00  from holding Cleanaway Waste Management or generate 23.26% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Insignificant
Accuracy	97.67%
Values	Daily Returns

The Gap,  vs.  Cleanaway Waste Management

Gap,

Risk-Adjusted Performance

1 of 100

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in The Gap, are ranked lower than 1 (%) of all global equities and portfolios over the last 90 days. Even with relatively invariable basic indicators, Gap, is not utilizing all of its potentials. The recent stock price agitation, may contribute to short-term losses for the retail investors.

Cleanaway Waste Mana

Risk-Adjusted Performance

7 of 100

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Cleanaway Waste Management are ranked lower than 7 (%) of all global equities and portfolios over the last 90 days. Despite nearly inconsistent fundamental indicators, Cleanaway Waste reported solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Gap, and Cleanaway Waste

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

The idea behind The Gap, and Cleanaway Waste Management 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 Portfolio Backtesting module to avoid under-diversification and over-optimization by backtesting your portfolios.