Correlation Between BQE Water and Casella Waste
Can any of the company-specific risk be diversified away by investing in both BQE Water and Casella 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 BQE Water and Casella Waste into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between BQE Water and Casella Waste Systems, you can compare the effects of market volatilities on BQE Water and Casella 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 BQE Water with a short position of Casella Waste. Check out your portfolio center. Please also check ongoing floating volatility patterns of BQE Water and Casella Waste.
Diversification Opportunities for BQE Water and Casella Waste
-0.53 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between BQE and Casella is -0.53. Overlapping area represents the amount of risk that can be diversified away by holding BQE Water and Casella Waste Systems in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Casella Waste Systems and BQE Water 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 BQE Water are associated (or correlated) with Casella Waste. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Casella Waste Systems has no effect on the direction of BQE Water i.e., BQE Water and Casella Waste go up and down completely randomly.
Pair Corralation between BQE Water and Casella Waste
Assuming the 90 days horizon BQE Water is expected to under-perform the Casella Waste. But the pink sheet apears to be less risky and, when comparing its historical volatility, BQE Water is 1.02 times less risky than Casella Waste. The pink sheet trades about -0.07 of its potential returns per unit of risk. The Casella Waste Systems is currently generating about 0.21 of returns per unit of risk over similar time horizon. If you would invest 10,695 in Casella Waste Systems on November 27, 2024 and sell it today you would earn a total of 704.00 from holding Casella Waste Systems or generate 6.58% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 95.24% |
| Values | Daily Returns |
BQE Water vs. Casella Waste Systems
Performance |
| Timeline |
| BQE Water |
| Casella Waste Systems |
BQE Water and Casella Waste Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with BQE Water and Casella Waste
The main advantage of trading using opposite BQE Water and Casella Waste positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if BQE Water position performs unexpectedly, Casella 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 Casella Waste will offset losses from the drop in Casella Waste's long position.| BQE Water vs. JPX Global | BQE Water vs. Susglobal Energy Corp | BQE Water vs. Agilyx AS | BQE Water vs. EcoPlus |
| Casella Waste vs. Clean Harbors | Casella Waste vs. Montrose Environmental Grp | Casella Waste vs. Republic Services | Casella Waste vs. Waste Connections |
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 Pattern Recognition module to use different Pattern Recognition models to time the market across multiple global exchanges.
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