Correlation Between Cleanaway Waste and Seven West

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Can any of the company-specific risk be diversified away by investing in both Cleanaway Waste and Seven West 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 Cleanaway Waste and Seven West into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Cleanaway Waste Management and Seven West Media, you can compare the effects of market volatilities on Cleanaway Waste and Seven West 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 Cleanaway Waste with a short position of Seven West. Check out your portfolio center. Please also check ongoing floating volatility patterns of Cleanaway Waste and Seven West.

Diversification Opportunities for Cleanaway Waste and Seven West

CleanawaySevenDiversified AwayCleanawaySevenDiversified Away100%
0.62
  Correlation Coefficient

Poor diversification

The 3 months correlation between Cleanaway and Seven is 0.62. Overlapping area represents the amount of risk that can be diversified away by holding Cleanaway Waste Management and Seven West Media in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Seven West Media and Cleanaway Waste 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 Cleanaway Waste Management are associated (or correlated) with Seven West. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Seven West Media has no effect on the direction of Cleanaway Waste i.e., Cleanaway Waste and Seven West go up and down completely randomly.

Pair Corralation between Cleanaway Waste and Seven West

Assuming the 90 days trading horizon Cleanaway Waste Management is expected to generate 0.34 times more return on investment than Seven West. However, Cleanaway Waste Management is 2.94 times less risky than Seven West. It trades about -0.12 of its potential returns per unit of risk. Seven West Media is currently generating about -0.06 per unit of risk. If you would invest  295.00  in Cleanaway Waste Management on September 26, 2024 and sell it today you would lose (27.00) from holding Cleanaway Waste Management or give up 9.15% of portfolio value over 90 days.
Time Period3 Months [change]
DirectionMoves Together 
StrengthSignificant
Accuracy100.0%
ValuesDaily Returns

Cleanaway Waste Management  vs.  Seven West Media

 Performance 
JavaScript chart by amCharts 3.21.15OctNovDec -20-15-10-50
JavaScript chart by amCharts 3.21.15CWY SWM
       Timeline  
Cleanaway Waste Mana 

Risk-Adjusted Performance

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Over the last 90 days Cleanaway Waste Management has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of latest uncertain performance, the Stock's basic indicators remain stable and the newest uproar on Wall Street may also be a sign of mid-term gains for the firm private investors.
JavaScript chart by amCharts 3.21.15NovDecDec2.652.72.752.82.852.92.95
Seven West Media 

Risk-Adjusted Performance

0 of 100

 
Weak
 
Strong
Very Weak
Over the last 90 days Seven West Media has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of uncertain performance in the last few months, the Stock's primary indicators remain comparatively stable which may send shares a bit higher in January 2025. The newest uproar may also be a sign of mid-term up-swing for the firm private investors.
JavaScript chart by amCharts 3.21.15NovDecDec0.140.1450.150.1550.160.1650.170.1750.18

Cleanaway Waste and Seven West Volatility Contrast

   Predicted Return Density   
JavaScript chart by amCharts 3.21.15-2.05-1.57-1.09-0.61-0.130.290.771.251.732.21 0.050.100.150.200.25
JavaScript chart by amCharts 3.21.15CWY SWM
       Returns  

Pair Trading with Cleanaway Waste and Seven West

The main advantage of trading using opposite Cleanaway Waste and Seven West positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Cleanaway Waste position performs unexpectedly, Seven West 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 Seven West will offset losses from the drop in Seven West's long position.
The idea behind Cleanaway Waste Management and Seven West Media 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 My Watchlist Analysis module to analyze my current watchlist and to refresh optimization strategy. Macroaxis watchlist is based on self-learning algorithm to remember stocks you like.

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