Correlation Between Waste Management and Impax Asset
Can any of the company-specific risk be diversified away by investing in both Waste Management and Impax Asset 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 Waste Management and Impax Asset into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Waste Management and Impax Asset Management, you can compare the effects of market volatilities on Waste Management and Impax Asset 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 Waste Management with a short position of Impax Asset. Check out your portfolio center. Please also check ongoing floating volatility patterns of Waste Management and Impax Asset.
Diversification Opportunities for Waste Management and Impax Asset
0.53 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Waste and Impax is 0.53. Overlapping area represents the amount of risk that can be diversified away by holding Waste Management and Impax Asset Management in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Impax Asset Management and Waste Management 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 Waste Management are associated (or correlated) with Impax Asset. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Impax Asset Management has no effect on the direction of Waste Management i.e., Waste Management and Impax Asset go up and down completely randomly.
Pair Corralation between Waste Management and Impax Asset
Assuming the 90 days trading horizon Waste Management is expected to generate 0.29 times more return on investment than Impax Asset. However, Waste Management is 3.49 times less risky than Impax Asset. It trades about 0.31 of its potential returns per unit of risk. Impax Asset Management is currently generating about -0.26 per unit of risk. If you would invest 20,335 in Waste Management on October 23, 2024 and sell it today you would earn a total of 921.00 from holding Waste Management or generate 4.53% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 95.0% |
| Values | Daily Returns |
Waste Management vs. Impax Asset Management
Performance |
| Timeline |
| Waste Management |
| Impax Asset Management |
Waste Management and Impax Asset Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Waste Management and Impax Asset
The main advantage of trading using opposite Waste Management and Impax Asset positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Waste Management position performs unexpectedly, Impax Asset 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 Impax Asset will offset losses from the drop in Impax Asset's long position.| Waste Management vs. Herald Investment Trust | Waste Management vs. Kinnevik Investment AB | Waste Management vs. JPMorgan Japanese Investment | Waste Management vs. Smithson Investment Trust |
| Impax Asset vs. Catalyst Media Group | Impax Asset vs. CATLIN GROUP | Impax Asset vs. Tamburi Investment Partners | Impax Asset vs. Magnora ASA |
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 Price Transformation module to use Price Transformation models to analyze the depth of different equity instruments across global markets.
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