Correlation Between ICF International and Casella Waste
Can any of the company-specific risk be diversified away by investing in both ICF International 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 ICF International and Casella Waste into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between ICF International and Casella Waste Systems, you can compare the effects of market volatilities on ICF International 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 ICF International with a short position of Casella Waste. Check out your portfolio center. Please also check ongoing floating volatility patterns of ICF International and Casella Waste.
Diversification Opportunities for ICF International and Casella Waste
-0.63 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between ICF and Casella is -0.63. Overlapping area represents the amount of risk that can be diversified away by holding ICF International 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 ICF International 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 ICF International 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 ICF International i.e., ICF International and Casella Waste go up and down completely randomly.
Pair Corralation between ICF International and Casella Waste
Given the investment horizon of 90 days ICF International is expected to under-perform the Casella Waste. In addition to that, ICF International is 2.08 times more volatile than Casella Waste Systems. It trades about -0.27 of its total potential returns per unit of risk. Casella Waste Systems is currently generating about 0.41 per unit of volatility. If you would invest 9,934 in Casella Waste Systems on September 2, 2024 and sell it today you would earn a total of 1,387 from holding Casella Waste Systems or generate 13.96% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
ICF International vs. Casella Waste Systems
Performance |
| Timeline |
| ICF International |
| Casella Waste Systems |
ICF International and Casella Waste Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with ICF International and Casella Waste
The main advantage of trading using opposite ICF International and Casella Waste positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if ICF International 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.| ICF International vs. Forrester Research | ICF International vs. Huron Consulting Group | ICF International vs. Franklin Covey | ICF International vs. FTI Consulting |
| 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 Price Transformation module to use Price Transformation models to analyze the depth of different equity instruments across global markets.
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