Correlation Between Casella Waste and Aqua Metals
Can any of the company-specific risk be diversified away by investing in both Casella Waste and Aqua Metals 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 Aqua Metals 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 Aqua Metals, you can compare the effects of market volatilities on Casella Waste and Aqua Metals 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 Aqua Metals. Check out your portfolio center. Please also check ongoing floating volatility patterns of Casella Waste and Aqua Metals.
Diversification Opportunities for Casella Waste and Aqua Metals
-0.44 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Casella and Aqua is -0.44. Overlapping area represents the amount of risk that can be diversified away by holding Casella Waste Systems and Aqua Metals in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Aqua Metals 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 Aqua Metals. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Aqua Metals has no effect on the direction of Casella Waste i.e., Casella Waste and Aqua Metals go up and down completely randomly.
Pair Corralation between Casella Waste and Aqua Metals
Given the investment horizon of 90 days Casella Waste Systems is expected to generate 0.25 times more return on investment than Aqua Metals. However, Casella Waste Systems is 4.02 times less risky than Aqua Metals. It trades about 0.05 of its potential returns per unit of risk. Aqua Metals is currently generating about -0.06 per unit of risk. If you would invest 7,927 in Casella Waste Systems on November 1, 2024 and sell it today you would earn a total of 2,964 from holding Casella Waste Systems or generate 37.39% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Casella Waste Systems vs. Aqua Metals
Performance |
| Timeline |
| Casella Waste Systems |
| Aqua Metals |
Casella Waste and Aqua Metals Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Casella Waste and Aqua Metals
The main advantage of trading using opposite Casella Waste and Aqua Metals positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Casella Waste position performs unexpectedly, Aqua Metals 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 Aqua Metals will offset losses from the drop in Aqua Metals' long position.| Casella Waste vs. Clean Harbors | Casella Waste vs. Montrose Environmental Grp | Casella Waste vs. Republic Services | Casella Waste vs. Waste Connections |
| Aqua Metals vs. LanzaTech Global | Aqua Metals vs. Waste Management | Aqua Metals vs. Clean Harbors | Aqua Metals vs. Casella Waste Systems |
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 Equity Forecasting module to use basic forecasting models to generate price predictions and determine price momentum.
Other Complementary Tools
| Theme Ratings Determine theme ratings based on digital equity recommendations. Macroaxis theme ratings are based on combination of fundamental analysis and risk-adjusted market performance | |
| Earnings Calls Check upcoming earnings announcements updated hourly across public exchanges | |
| Price Exposure Probability Analyze equity upside and downside potential for a given time horizon across multiple markets | |
| Portfolio Backtesting Avoid under-diversification and over-optimization by backtesting your portfolios | |
| Premium Stories Follow Macroaxis premium stories from verified contributors across different equity types, categories and coverage scope |