Correlation Between Casella Waste and Veolia Environnement
Can any of the company-specific risk be diversified away by investing in both Casella Waste and Veolia Environnement 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 Veolia Environnement 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 Veolia Environnement SA, you can compare the effects of market volatilities on Casella Waste and Veolia Environnement 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 Veolia Environnement. Check out your portfolio center. Please also check ongoing floating volatility patterns of Casella Waste and Veolia Environnement.
Diversification Opportunities for Casella Waste and Veolia Environnement
-0.13 | Correlation Coefficient |
Good diversification
The 3 months correlation between Casella and Veolia is -0.13. Overlapping area represents the amount of risk that can be diversified away by holding Casella Waste Systems and Veolia Environnement SA in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Veolia Environnement 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 Veolia Environnement. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Veolia Environnement has no effect on the direction of Casella Waste i.e., Casella Waste and Veolia Environnement go up and down completely randomly.
Pair Corralation between Casella Waste and Veolia Environnement
Given the investment horizon of 90 days Casella Waste Systems is expected to generate 1.05 times more return on investment than Veolia Environnement. However, Casella Waste is 1.05 times more volatile than Veolia Environnement SA. It trades about 0.05 of its potential returns per unit of risk. Veolia Environnement SA is currently generating about 0.01 per unit of risk. If you would invest 8,038 in Casella Waste Systems on November 2, 2024 and sell it today you would earn a total of 2,853 from holding Casella Waste Systems or generate 35.49% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Casella Waste Systems vs. Veolia Environnement SA
Performance |
| Timeline |
| Casella Waste Systems |
| Veolia Environnement |
Casella Waste and Veolia Environnement Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Casella Waste and Veolia Environnement
The main advantage of trading using opposite Casella Waste and Veolia Environnement positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Casella Waste position performs unexpectedly, Veolia Environnement 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 Veolia Environnement will offset losses from the drop in Veolia Environnement's long position.| Casella Waste vs. Clean Harbors | Casella Waste vs. Montrose Environmental Grp | Casella Waste vs. Republic Services | Casella Waste vs. Waste Connections |
| Veolia Environnement vs. Waste Management | Veolia Environnement vs. Casella Waste Systems | Veolia Environnement vs. Montrose Environmental Grp | Veolia Environnement vs. Clean Harbors |
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 Portfolio Center module to all portfolio management and optimization tools to improve performance of your portfolios.
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