Correlation Between Casella Waste and Tomra Systems
Can any of the company-specific risk be diversified away by investing in both Casella Waste and Tomra Systems 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 Tomra Systems 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 Tomra Systems ASA, you can compare the effects of market volatilities on Casella Waste and Tomra Systems 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 Tomra Systems. Check out your portfolio center. Please also check ongoing floating volatility patterns of Casella Waste and Tomra Systems.
Diversification Opportunities for Casella Waste and Tomra Systems
-0.38 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Casella and Tomra is -0.38. Overlapping area represents the amount of risk that can be diversified away by holding Casella Waste Systems and Tomra Systems ASA in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Tomra Systems ASA 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 Tomra Systems. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Tomra Systems ASA has no effect on the direction of Casella Waste i.e., Casella Waste and Tomra Systems go up and down completely randomly.
Pair Corralation between Casella Waste and Tomra Systems
Given the investment horizon of 90 days Casella Waste is expected to generate 1.67 times less return on investment than Tomra Systems. But when comparing it to its historical volatility, Casella Waste Systems is 2.51 times less risky than Tomra Systems. It trades about 0.11 of its potential returns per unit of risk. Tomra Systems ASA is currently generating about 0.07 of returns per unit of risk over similar time horizon. If you would invest 768.00 in Tomra Systems ASA on August 25, 2024 and sell it today you would earn a total of 517.00 from holding Tomra Systems ASA or generate 67.32% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 92.25% |
| Values | Daily Returns |
Casella Waste Systems vs. Tomra Systems ASA
Performance |
| Timeline |
| Casella Waste Systems |
| Tomra Systems ASA |
Casella Waste and Tomra Systems Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Casella Waste and Tomra Systems
The main advantage of trading using opposite Casella Waste and Tomra Systems positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Casella Waste position performs unexpectedly, Tomra Systems 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 Tomra Systems will offset losses from the drop in Tomra Systems' long position.| Casella Waste vs. Clean Harbors | Casella Waste vs. Montrose Environmental Grp | Casella Waste vs. Republic Services | Casella Waste vs. Waste Connections |
| Tomra Systems vs. Waste Connections | Tomra Systems vs. Clean Harbors | Tomra Systems vs. Casella Waste Systems | Tomra Systems vs. Waste Management |
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 Money Flow Index module to determine momentum by analyzing Money Flow Index and other technical indicators.
Other Complementary Tools
| Equity Search Search for actively traded equities including funds and ETFs from over 30 global markets | |
| Options Analysis Analyze and evaluate options and option chains as a potential hedge for your portfolios | |
| Crypto Correlations Use cryptocurrency correlation module to diversify your cryptocurrency portfolio across multiple coins | |
| Price Transformation Use Price Transformation models to analyze the depth of different equity instruments across global markets | |
| Portfolio Center All portfolio management and optimization tools to improve performance of your portfolios |