Correlation Between Casella Waste and Anaergia
Can any of the company-specific risk be diversified away by investing in both Casella Waste and Anaergia 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 Casella Waste and Anaergia into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Casella Waste Systems and Anaergia, you can compare the effects of market volatilities on Casella Waste and Anaergia 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 Casella Waste with a short position of Anaergia. Check out your portfolio center. Please also check ongoing floating volatility patterns of Casella Waste and Anaergia.
Diversification Opportunities for Casella Waste and Anaergia
0.27 | Correlation Coefficient |
Modest diversification
The 3 months correlation between Casella and Anaergia is 0.27. Overlapping area represents the amount of risk that can be diversified away by holding Casella Waste Systems and Anaergia in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Anaergia and Casella 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 Casella Waste Systems are associated (or correlated) with Anaergia. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Anaergia has no effect on the direction of Casella Waste i.e., Casella Waste and Anaergia go up and down completely randomly.
Pair Corralation between Casella Waste and Anaergia
Given the investment horizon of 90 days Casella Waste is expected to generate 57.43 times less return on investment than Anaergia. But when comparing it to its historical volatility, Casella Waste Systems is 56.99 times less risky than Anaergia. It trades about 0.1 of its potential returns per unit of risk. Anaergia is currently generating about 0.1 of returns per unit of risk over similar time horizon. If you would invest 22.00 in Anaergia on September 1, 2024 and sell it today you would earn a total of 46.00 from holding Anaergia or generate 209.09% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Casella Waste Systems vs. Anaergia
Performance |
| Timeline |
| Casella Waste Systems |
| Anaergia |
Casella Waste and Anaergia Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Casella Waste and Anaergia
The main advantage of trading using opposite Casella Waste and Anaergia positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Casella Waste position performs unexpectedly, Anaergia 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 Anaergia will offset losses from the drop in Anaergia's long position.| 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 Odds Of Bankruptcy module to get analysis of equity chance of financial distress in the next 2 years.
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