Correlation Between Stericycle and Sharps Compliance

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

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

Diversification Opportunities for Stericycle and Sharps Compliance

0.0

Correlation Coefficient

Stericycle  Sharps Compliance

Pay attention - limited upside

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

Pair Corralation between Stericycle and Sharps Compliance

If you would invest (100.00) in Sharps Compliance Corp on January 20, 2024 and sell it today you would earn a total of  100.00  from holding Sharps Compliance Corp or generate -100.0% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Flat
Strength	Insignificant
Accuracy	0.0%
Values	Daily Returns

Stericycle  vs.  Sharps Compliance Corp

Stericycle

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Stericycle has generated negative risk-adjusted returns adding no value to investors with long positions. Despite quite persistent fundamental indicators, Stericycle is not utilizing all of its potentials. The recent stock price mess, may contribute to short-term losses for the institutional investors.

Sharps Compliance Corp

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Sharps Compliance Corp has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of rather sound technical and fundamental indicators, Sharps Compliance is not utilizing all of its potentials. The newest stock price tumult, may contribute to shorter-term losses for the shareholders.

Pair Trading with Stericycle and Sharps Compliance

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

The idea behind Stericycle and Sharps Compliance Corp 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.